The UK's Financial Reporting Council (FRC) has updated its standard related to audits of group financial statements, in response to recently revised standards released by the International Auditing and Assurance Standards Board (IAASB).
"The revisions build upon the recently revised international version of the standard, with an enhanced focus on the risk of material misstatement at the financial statement level and the need for robust communication between group and component auditors," the FRC said in a news release.
The updated standard of ISA (UK) 600 published by the regulator "expands on how ISA (UK) 220 (Revised July 2021) is to be applied in relation to an audit of group financial statements."
The revisions to ISA (UK) 600, adapted as necessary in the circumstances, may also be useful in an audit of financial statements when the engagement team includes individuals from another firm, the FRC said.
The FRC said it supports the aim of the IAASB to address the key public interest issues in respect of the audits of group financial statements. The FRC believes "the enhancements to ISA 600 will support group auditors' efforts in achieving high-quality audits," according to its feedback statement.
The proposed effective date for the revised standard is for audits of group financial statements for periods beginning on or after 15 December 2023, which is in line with the IAASB's effective date.
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