## SA 600: Using the Work of Another Auditor

### When Does SA 600 Apply?

SA 600 applies when a Principal Auditor (PA) uses the work of another auditor (Other Auditor / OA) who has audited a component of the entity.

Components include:

Branch
Subsidiary
Joint Venture
Associate

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### Principal Auditor vs. Other Auditor

	Principal Auditor (PA)	Other Auditor (OA)
Audits	Parent / main entity	Component (branch, subsidiary, etc.)
Responsibility	Overall audit opinion on the entity	Opinion on the component
Reliance	Normally relies on OA's work	Performs work per PA's coordination

In special circumstances, PA may:

Visit the components directly
Examine the Books of OA of those components

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### Audit Procedures When Using OA's Work

#### Step (a) – Advise OA on Use of Their Work

PA must:

Inform OA how OA's work/report will be used by PA.
Ensure sufficient coordination from the planning stage.
Communicate to OA:
Matters requiring special consideration
Time table for completion of the audit
Procedures for identifying inter-component transactions that require disclosure

#### Step (b) – Communicate Significant Requirements to OA

PA advises OA about:

Significant Accounting requirements
Auditing requirements
Reporting requirements

#### Step (c) – Assess Competence of OA

PA should:

Meet OA personally to assess competence
Review previous audit work performed by OA

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### Nature and Extent (N&E) of PA's Work

The level of PA's oversight over OA depends upon:

Circumstances of the engagement
PA's assessment of OA's competence

Worked example

### Example 1

Example 1 – Coordination from planning stage

M/s Ram & Co (PA) is auditing Holding Co Ltd. Its subsidiary, Sub Co Ltd, is audited by M/s Shyam & Co (OA). Ram & Co must coordinate with Shyam & Co.

What must PA do?

Advise OA from the planning stage about how OA's audit report will be used.
Inform OA of the time table (e.g., OA must complete audit by 15 March).
Notify OA of significant accounting/reporting requirements under Ind AS applicable to the group.
Identify inter-company transactions (e.g., intra-group loans, management charges) that need group-level disclosure.

### Example 2

Example 2 – Assessing OA competence

PA is reviewing a new OA appointed to audit a foreign joint venture. PA has no prior knowledge of OA's work.

Answer: PA should: (a) meet OA to assess their competence and understanding of applicable standards; (b) review OA's prior audit work on the same or similar entities. The N&E of PA's additional procedures on OA's work will increase if PA has doubts about OA's competence.

⚠️ Common exam mistakes

Thinking the Principal Auditor must always physically visit and inspect all components — SA 600 says this is done only in special circumstances.
Not knowing that coordination must begin from the planning stage itself, not after OA completes fieldwork.
Confusing OA (an external auditor of a component) with an internal auditor — SA 600 applies only to external Other Auditors.
Forgetting that PA must communicate significant accounting AND auditing AND reporting requirements to OA — all three, not just reporting.
Assuming PA's reliance on OA is unlimited — it depends on PA's view of OA's competence and the specific circumstances.

Reference:

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SA 600 – Using the Work of Another Auditor

Worked example

⚠️ Common exam mistakes