SA 299 Joint Audit — Planning and Joint & Several Responsibility
## SA 299: Joint Audit of Financial Statements
A joint audit occurs when two or more audit firms are appointed as auditors of the same entity. SA 299 governs conduct of joint audits.
### Pre-Commencement: Joint Audit Plan
Before the audit begins, joint auditors must discuss and develop a joint audit plan covering:
1. Division of audit areas — identify which areas each firm handles
2. Common audit areas — areas examined by all joint auditors together
3. Reporting objectives — understand the engagement's reporting goals
4. Significant factors — communicate factors directing team efforts
5. Prior results — consider preliminary engagement activities or similar prior engagements
6. Resources — determine nature, timing, and extent of resources required
### Joint and Several Responsibility
All joint auditors are jointly and severally responsible for:
#
Area
(i)
Audit work not divided among joint auditors (carried out by all)
(ii)
Joint audit planning decisions for common audit areas
(iii)
Matters brought to notice of all joint auditors where there is agreement among them
(iv)
Verifying that financial statements comply with relevant statutes
(v)
Presentation and disclosure per the applicable financial reporting framework
(vi)
Ensuring the audit report complies with statutes, SAs, and ICAI pronouncements
### Individual Responsibility
Each joint auditor is responsible only for work assigned to their division — they are not responsible for work carried out solely by other auditors, unless they become aware of issues in that work.
Worked example
### Example 1
QR & Associates and MNO & Co. (RTP May 2024): Two CA firms appointed as joint auditors of Gama and Beta Limited. Before audit commencement, they must develop a joint audit plan that: (a) divides audit areas between the two firms and identifies common areas both will examine; (b) establishes reporting objectives for the engagement; (c) communicates significant factors directing each team's efforts; (d) considers results of any preliminary engagement activities; and (e) determines resource requirements including nature and timing.
### Example 2
ASD Limited (RTP May 2024): Three CA firms appointed for statutory audit of a multi-national company. All three are jointly and severally responsible for: (i) audit work not divided among them; (ii) joint planning decisions on common audit areas; (iii) matters communicated and agreed upon by all auditors; (iv) verifying statutory compliance of the financial statements; (v) proper presentation and disclosure; and (vi) compliance of the audit report with statutory and SA requirements — each firm can be held accountable for these shared responsibilities.
⚠️ Common exam mistakes
Assuming joint auditors are equally responsible for all audit work — each firm is individually responsible only for their assigned division
Starting the audit without developing a joint audit plan — pre-commencement planning is mandatory under SA 299
Failing to identify common audit areas — these require examination by all joint auditors together
Misunderstanding 'jointly and severally' — it means any one firm can be held responsible for the jointly-owned areas by a third party; this is a strong form of shared liability
Bare-Act text Joint Audit Plan and Responsibilities of Joint Auditors · SA 299 – Joint Audit of Financial Statements · click to expand
Before the commencement of the audit, the joint auditors should discuss and develop a joint audit plan. In developing the joint audit plan, the joint auditors should: (a) identify division of audit areas and common audit areas; (b) ascertain the reporting objectives of the engagement; (c) consider and communicate among all joint auditors the factors that are significant in directing the engagement team's efforts; (d) consider the results of preliminary engagement activities; (e) ascertain the nature, timing and extent of resources necessary to accomplish the engagement. All the joint auditors shall be jointly and severally responsible for: (i) the audit work which is not divided among the joint auditors; (ii) decisions taken by all the joint auditors in respect of common audit areas; (iii) matters brought to the notice of joint auditors where there is agreement; (iv) examining that financial statements comply with relevant statutes; (v) presentation and disclosure per the applicable financial reporting framework; (vi) ensuring the audit report complies with relevant statutes, SAs, and ICAI pronouncements.