VIETNAMESE STANDARDS ON AUDITING
STANDARD No. 600
USING THE WORK OF ANOTHER AUDITOR
(Issued in pursuance of the Finance Minister’s Decision No. 28/2003/QD-BTC dated 14 March 2003)
GENERAL PROVISIONS
01. The purpose of this standard is to prescribe the basic principles and procedures and guide the mode of application thereof to the use of other auditors’ auditing materials regarding the financial information of one or many units when auditing the financial statements of a unit, including financial information of subordinate units and of other economic units.
02. When the principal auditors use the audit materials of other auditors, they must determine the extent of influence of such materials on their audits.
03. This standard shall apply to the audit of the financial statements of a unit, which include financial information of one or many subordinate units, and other economic units. This standard shall not apply to cases involving two or more auditors appointed as joint auditors for a unit, nor does it deal with the relationship between the present auditors and the previous year’s auditors.
Where the principal auditors conclude that the financial statements of subordinate units and other economic units have an immaterial effect, this standard shall not apply, except where many units, though each having an immaterial effect, can together produce a material effect, the application of this standard should be considered.
The audited units (clients), units and individuals related to the use of other auditors’ materials by the principal auditors must possess necessary knowledge of the essential principles and procedures in this standard so that they can cooperate with the audit firms and the principal auditors in the auditing process.
The terms in this standard are construed as follows:
04. Principal auditors mean the auditors with responsibility for auditing the financial statements and signing the auditing reports of units, including financial information of one or many subordinate units and other economic units audited by the other auditors.
05. Other auditors mean the auditors with responsibility for auditing the financial statements and signing the auditing reports of subordinate units or other economic units, which are included in the financial statements of the superior unit. Another auditor is the auditor working for another audit firm or for a branch or office of the audit firm.
06. Subordinate units mean units, components, branches, subsidiaries or member companies of the superior units, whose financial information is included in the superior units’ financial statements audited by the principal auditors.
07. Other economic units mean units, joint-venture companies, associated companies with economic relations, whose financial information is included in the units’ financial statements audited by the principal auditors.
CONTENTS OF THE STANDARD
Acceptance as principal auditors
08. To accept auditor contracts with the principal auditor’s responsibility, auditors and audit firms must consider the following matters:
+ The materiality of the portion of the financial statements which the principal auditors audit;
+ The principal auditors’ knowledge about the situation of business activities of the subordinate units and other economic units audited by the other auditors;
+ The risk of material errors in the financial statements of the subordinate units and other economic units audited by other auditors;
+ The possibility to perform additional procedures as prescribed in this standard, which relate to financial information of subordinate units and other economic units audited by other auditors with the participation of the principal auditors.
Audit procedures performed by the principal auditors
09. When planning the audits involving the use of other auditor’s materials, the principal auditors must consider the professional capability of the audit firms and other auditors in the context of their actual work.
In order to consider professional capability of the audit firms and other auditors, the principal auditors must base themselves on the following sources of information: the audit organizations where the other auditors have made practice registration; colleagues of the other auditors; clients or people having working relations with the other auditors, or through face-to-face meetings with the other auditors.
10. The principal auditors should perform necessary procedures to obtain sufficient appropriate audit evidences that the other auditors’ work is relevant to the principal auditors’ audit work and purposes in each specific audit.
11. The principal auditors should advise the other auditors of:
+ The independence requirements related to the superior unit, subordinate units and other economic units and obtain written representations on compliance therewith
+ The use of the other auditors’ materials and reports and the coordination between the two parties right at the audit planning stage;
+ Matters requiring special consideration; procedures for identification of internal transactions that need to be stated in written explanations, and the timetable for the audit;
+ The accounting, auditing and reporting requirements and obtain written representations on compliance therewith.
12. The principal auditors may discuss with the other auditors the audit procedures already applied by the latter or review the other auditors’ audit dossiers. The performance of these audit procedures will depend on the specific context of the audit and on the principal auditors’ assessment of the professional capability of the other auditors.
13. The principal auditors are not required to apply the procedures stated in paragraph 12 if they have sufficient appropriate audit evidences that the audit procedures performed by the other auditors are satisfactory and ensure the audit quality.
14. The principal auditors must consider the significant findings of the other auditors.
15. The principal auditors may discuss with the other auditors and the directors of the subordinate units and other economic units the significant findings or other matters affecting the financial statements of such units. When necessary, the principal auditors may perform additional procedures to check the records or financial statements of the subordinate units. Depending on the particular circumstances, these checking procedures may be performed by the principal auditors or the other auditors.
16. The principal auditors should archive in their audit dossiers documents relating to the financial statements of the subordinate units and other economic units audited by the other auditors; documents on the performance of audit procedures and conclusions reached therefrom; the names of the other auditors and any conclusions, though being immaterial, reached by the other auditors.
Cooperation between auditors
17. The other auditors must cooperate with the principal auditors in cases the principal auditors use their auditing materials. For example, the other auditors must inform the principal auditors of any portions of their work that cannot be carried out as requested or of any matters significantly affecting the other auditors’ work, which are of the principal auditors’ concern. Similarly, the principal auditors should notify the other auditors of any matters which are discovered by the principal auditors and may considerably affect the financial statements of the subordinate units or other economic units audited by the other auditors.
The cooperation between auditors should be agreed upon by the authorities managing the audits.
Conclusions and elaboration of auditing reports
18. When the principal auditors conclude that the other auditors’ materials cannot be used and they has not been able to perform additional audit procedures for the financial statements of the subordinate units and other economic units audited by the other auditors, if deeming that such would materially affect the audited financial statements, the principal auditors should express a partial acceptance opinion or an opinion to refuse to express an opinion because there is a limitation in the scope of the audit.
19. When the principal auditors have relied on the other auditors’ opinions, their reports must clearly state this and specify the limitation of the financial statements audited by the other auditors.
20. Where the other auditors issue or plan to issue a modified auditing report, the principal auditors should consider the nature and significance of the modifications in relation to the financial statements audited by the principal auditors and determine whether their auditing reports need to be modified.
Responsibility of the principal auditors
21. The principal auditors must observe the principles and procedures prescribed in this standard when auditing the financial statements of the superior units, which include financial information of the subordinate units and other economic units, and must be responsible for the financial statement audit risks./.
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