MCA Examines Revised Framework for Group Audit Responsibility

The Ministry of Corporate Affairs is reportedly in the advanced stages of consultation on a revised auditing framework that may significantly increase the responsibilities of group auditors while examining the consolidated financial statements of corporate groups.

The proposed framework is linked to the revised Standard on Auditing 600, which governs audits of group financial statements and sets out the responsibilities of auditors when audit work relating to subsidiaries, branches, joint ventures, associates, or other component entities is performed by separate component auditors.

Under the proposed approach, the group auditor may be required to exercise greater oversight over the audit work carried out at the subsidiary or component level. This could include deeper involvement in audit planning, assessment of component-level risks, review of the work performed by component auditors, evaluation of significant audit findings, and consideration of whether sufficient and appropriate audit evidence has been obtained for the group financial statements. CA Sansaar