Kuala Lumpur, 14 May 2012
Group audit dominates discussions on implementation of ISA 600
The Audit Oversight Board of Malaysia (AOB) hosted regulators from Malaysia, Singapore and Thailand, other related agencies and representatives from the Big-4 audit firms, at a roundtable in Kuala Lumpur today, to discuss issues relating to the implementation of the International Standards in Auditing No 600 (ISA 600). Under the standard, the group engagement partner is responsible for the direction, supervision and performance of the group audit engagement in compliance with professional standards and regulatory and legal requirements. The group engagement partner also determines whether the auditor’s report that is issued is appropriate.
Group audit is becoming an important topic given that many companies are operating in more than one jurisdiction and could be audited by more than one audit firm. Under these circumstances, the ability of the group engagement partner to comply with the requirements of ISA 600 is critical in ensuring quality audit.
The audit firms shared their challenges in implementing the standards, including the difficulties faced in obtaining information from significant components accounted for under the equity method, especially if their shares are listed. The audit regulators on the other hand shared the findings, obtained through their audit inspections in the three countries, on how audit firms applied ISA 600.
The roundtable was held on the side of the ASEAN Audit Regulators Group (AARG) meeting attended by the AOB, the Accounting and Corporate Regulatory Authority of Singapore and the Securities and Exchange Commission, Thailand. The AARG was set up to enable audit regulators in ASEAN to share information regarding audit oversight activities and to co-operate in enhancing audit quality in ASEAN.
The three regulators would also be meeting with the leadership of the Big-4 audit firms of Malaysia, Singapore and Thailand to discuss audit quality and industry issues on Tuesday.
SECURITIES COMMISSION MALAYSIA