## SA 600: Using the Work of Another Auditor

### Core Principle

When a principal auditor relies on or delegates work to another auditor, the principal auditor remains fully responsible for forming and expressing the audit opinion. Responsibility cannot be transferred.

The principal auditor may rely on the other auditor's work, provided:

Adequate skill and care are exercised
No reason exists to doubt the reliance

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### Key Definitions

Term	Definition
Principal Auditor	The auditor responsible for reporting on the entity's financial information as a whole, which includes components audited by other auditors
Other Auditor	An auditor (other than the principal auditor) responsible for reporting on financial information of a component included in the overall financial statements
Component	A division, branch, subsidiary, JV, or associate whose financial info is included in the entity's overall FS

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### Rights of the Principal Auditor

1. Visit the component – May physically visit the component

2. Rely on work – Can normally rely on the other auditor's work unless special circumstances exist

3. Evaluate competence – Must evaluate competence only if the other auditor is not a member of ICAI

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### Duties of the Principal Auditor (7 Key Duties)

#	Duty
1	Advise the other auditor of how the work will be used
2	Communicate areas requiring special consideration
3	Communicate significant accounting, auditing, and reporting requirements
4	Issue a questionnaire detailing audit procedures to be applied
5	Review significant findings of the other auditor
6	Discuss findings with the other auditor and management of the component
7	Document in working papers the components audited by other auditors

> Mnemonic: A-A-A-Q-R-D-D (Advise, Areas, Accounting requirements, Questionnaire, Review, Discuss, Document)

Worked example

### Example 1

Example 1 – Responsibility not shifted

CA Priya is the principal auditor for XYZ Group Ltd. The Mumbai branch is audited by CA Rajesh. CA Rajesh issues a clean report on the branch, but later a fraud is discovered at the branch. Can CA Priya claim she is not responsible since CA Rajesh audited that branch?

Answer: No. Under SA 600, the principal auditor (CA Priya) remains responsible for forming the opinion on the group financial statements. She is entitled to rely on CA Rajesh's work only if she exercised adequate skill and care. She cannot escape responsibility by pointing to the other auditor.

### Example 2

Example 2 – Evaluating competence

ABC Ltd (listed company) engages a US-based audit firm (not a member of ICAI) to audit its overseas subsidiary. The principal auditor CA Sharma wishes to rely on this work.

Answer: Since the US firm is not a member of ICAI, CA Sharma must first evaluate whether that firm is competent before relying on their work. This is an additional right/duty under SA 600 that does not arise when the other auditor is an ICAI member.

### Example 3

Example 3 – Duties checklist

CA Arjun is the principal auditor for a group. He plans to use work done by CA Neha for the subsidiary. List the steps CA Arjun must take.

Answer:

1. Advise CA Neha about how her work will be used

2. Inform her of areas needing special attention

3. Communicate applicable accounting, auditing, and reporting requirements

4. Issue a questionnaire on audit procedures to be applied

5. Review CA Neha's significant findings

6. Discuss findings with CA Neha and subsidiary management

7. Document the subsidiary (component) in working papers as audited by another auditor

⚠️ Common exam mistakes

Thinking the principal auditor is relieved of responsibility when another auditor's work is used — responsibility always remains with the principal auditor.
Assuming the principal auditor must always evaluate the other auditor's competence — this is only required when the other auditor is NOT a member of ICAI.
Confusing the 'other auditor' with an 'expert' — SA 600 deals with other auditors (for components), not experts (covered separately under SA 620).
Forgetting that the principal auditor must both discuss findings AND document components in working papers — students often omit one of the 7 duties.
Treating 'special circumstances' as undefined — special circumstances (e.g., fraud suspicion at component) can override the normal right to rely on other auditor's work.

Reference: SA 600 – Using the Work of Another Auditor — SA 600 (ICAI)

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