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Microlesson · 5-min read

SA-600: Using the Work of Another Auditor

## SA-600: Using the Work of Another Auditor

### Key Definitions

TermMeaning
Principal Auditor (PA)The auditor of the entity whose FS include financial information of a component
Other Auditor (OA)The auditor who audits the component whose FS are included in the entity's FS
ComponentA branch, division, subsidiary, associate, or other entity whose financial information is part of the FS audited by the PA

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### Rights of the Principal Auditor

1. Visit the component and/or examine its books of account and other records.

2. Have discussions with the Other Auditor or review a written summary of the OA's audit procedures.

3. Require the Other Auditor to complete a detailed questionnaire.

4. The Other Auditor shall complete the questionnaire on a timely basis.

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### Handling Significant Findings of the Other Auditor

  • Discuss findings with the Other Auditor AND with management of the component.
  • Perform supplementary tests if required.

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### Professional Competence of the Other Auditor (Non-ICAI Member)

  • When planning to use the work of another auditor who is not a member of ICAI, the Principal Auditor must specifically consider the professional competence of that auditor.

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### Procedures of the Principal Auditor When Using Work of the Other Auditor

1. Perform procedures to obtain sufficient and appropriate audit evidence that the OA's work is adequate for the PA's purposes in the context of the specific assignment.

2. Procedures include:

a. Advise the OA regarding use of their work and report; make sufficient arrangements for coordination at the planning stage.

b. Advise the OA of significant accounting, auditing, and reporting requirements and obtain a representation as to compliance.

Key matters to inform the OA about:

  • Areas requiring special consideration.
  • Procedures for identifying inter-component transactions that may require disclosure.
  • The timetable for completion of the audit.

Worked example

### Example 1

Example 1 — PA and OA Coordination:

XYZ Ltd. (parent company) is audited by CA Priya (Principal Auditor). XYZ has a subsidiary in another state audited by CA Ravi (Other Auditor). CA Priya must: (1) inform CA Ravi of significant accounting requirements and reporting deadlines; (2) ask CA Ravi to complete a questionnaire on his procedures; and (3) review a written summary of CA Ravi's audit procedures before forming her opinion on the consolidated FS.

⚠️ Common exam mistakes

  • Assuming the Principal Auditor has no responsibility over the Other Auditor's work — the PA must perform procedures to ensure OA's work is adequate.
  • Forgetting the additional competence check when the Other Auditor is not a member of ICAI — this is an explicit additional requirement.
  • Not coordinating with the OA at the planning stage — coordination must happen early, not just at the reporting stage.
Reference:
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