What changed
ISA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors), is effective for audits of group financial statements for periods beginning on or after 15 December 2023. It moves group audits to a risk-based approach and strengthens the group auditor's responsibility for the whole engagement.
Key changes for group audits
- The group auditor determines components, which can be entities, business units, functions or shared service centres
- Scoping is driven by the risks of material misstatement, rather than a fixed "significant component" test
- More involvement in and review of component auditors' work, with clearer two-way communication
- Stronger emphasis on professional scepticism and documentation
What it means for group finance teams
Expect earlier and more detailed requests, especially for shared service centres and centrally performed processes. Groups with consistent charts of accounts, standard reporting packs and clean intercompany balances are much easier to audit.
How to prepare
- Standardise subsidiary reporting packs and close timetables
- Reconcile intercompany balances monthly, not just at year-end
- Document centrally performed controls and processes
- Agree audit timelines with group and component auditors early
This article is general information, not accounting, tax or legal advice. Rates, thresholds and effective dates should be confirmed with the official sources (IFRS Foundation, tax authorities, regulators) or your adviser before acting.