Document ID: chunk:federal_register_of_legislation:F2025C00096:body:0:p32
Version: federal_register_of_legislation:F2025C00096
Segment Type: other
Provision Reference: 
Character Range: 91658–95181

perform the audit engagement.

 2.          Determining whether component auditors have the appropriate competence and capabilities is a matter of professional judgement and is influenced by the nature and circumstances of the group audit engagement.  This determination influences the nature, timing and extent of the group engagement partner's direction and supervision of the component auditor and the review of their work.

 3.          In determining whether component auditors have the appropriate competence and capabilities to perform the assigned audit procedures at the component, the group engagement partner may consider matters such as:

           * Previous experience with or knowledge of the component auditor.

           * The component auditor's specialised skills (e.g., industry-specific knowledge).

           * The degree to which the group auditor and component auditor are subject to a common system of quality management, for example, whether the group auditor and a component auditor:

                   + Use common resources to perform the work (e.g., audit methodologies or IT applications);

                   + Share common policies or procedures affecting engagement performance (e.g., direction, supervision and review of work or consultation);

                   + Are subject to common monitoring activities; or

                   + Have other commonalities, including common leadership or a common cultural environment.

           * The consistency or similarity of:

                   + Laws or regulations or legal system;

                   + Language and culture;

                   + Education and training;

                   + Professional oversight, discipline, and external quality assurance; or

                   + Professional organisations and standards.

           * Information obtained about the component auditor through interactions with component management, those charged with governance, and other key personnel, such as internal auditors.

 1.          The procedures to determine the component auditor's competency and capability may include, for example:

           * An evaluation of the information communicated by the group auditor's firm to the group auditor, including:

                   + The firm's ongoing communication related to monitoring and remediation, in circumstances when the group auditor and component auditor are from the same firm.[57]

                   + Information from the network about the results of the monitoring activities undertaken by the network across the network firms.[58]

                   + Information obtained from professional body(ies) to which the component auditor belongs, the authorities by which the component auditor is licensed, or other third parties.

           * Discussing the assessed risks of material misstatement with the component auditor.

           * Requesting the component auditor to confirm their understanding of the matters referred to in paragraph 25 in writing.

           * Discussing the component auditor's competence and capabilities with colleagues in the group engagement partner's firm that have worked directly with the component auditor.

           * Obtaining published external inspection reports.

 1.          The group engagement partner's firm and the component auditor may be members of the same network and may be subject to common network requirements or use common network services.[59] When determining whether component auditors have the appropriate