SAS No. 15 Using the Work of Another Auditor

Status

Revised by Auditing Standards Committee in Taiwan on 2 November, 1999.

Summary

When the principal auditor uses the work of another auditor, the principal auditor should determine how the work of the other auditor will affect the audit. “Principal auditor” means the auditor with responsibility for reporting on the financial statements of an entity when those financial statements include financial information of one or more components audited by another auditor. “Other auditor” means an auditor, other than the principal auditor, with responsibility for reporting on the financial information of a component which is included in the financial statements audited by the principal auditor.

When planning to use the work of another auditor, the principal auditor should:

• Consider the professional competence of the other auditor in the context of the specific assignment.
• Advise the other auditor of the independence requirements regarding both the entity and the component and obtain written representation as to compliance with them.
• Advise the other auditor of the use of the other auditor’s work and report and make sufficient arrangements for the coordination of their efforts at the initial planning stage of the audit. The principal auditor would inform the other auditor of matters such as areas requiring special consideration, procedures for the identification of intercompany transactions that may require disclosure and the timetable for completion of the audit.
• Advise the other auditor of the accounting, auditing and reporting requirements and obtain written representation as to compliance with them.
• Consider the significant findings of the other auditor.

The principal auditor might also, for example, discuss with the other auditor the audit procedures applied, review a written summary of the other auditor’s procedures (which may be in the form of a questionnaire or checklist) or review working papers of the other auditor. The principal auditor may wish to perform these procedures during a visit to the other auditor. The nature, timing and extent of procedures will depend on the circumstances of the engagement and the principal auditor’s knowledge of the professional competence of the other auditor. This knowledge may have been enhanced from the review of previous audit work of the other auditor.

If the auditor’s report is based partially on the reports of the other auditor yet the principal auditor does not intend to divide the responsibility, the principal auditor will not need to make reference to the other auditor when issuing the audit report. However, if the principal auditor wishes to divide the responsibility, the principal auditor should state this fact clearly and should indicate in the introductory, scope and opinion paragraphs. 　 　 　

If the other auditor issues, or intends to issue, a modified auditor’s report, the principal auditor would consider whether the subject of the modification is of such a nature and significance, in relation to the financial statements of the entity on which the principal auditor is reporting, that a modification of the principal auditor’s report is required.

When the principal auditor concludes that the work of the other auditor cannot be used and the principal auditor has not been able to perform sufficient additional procedures regarding the financial information of the component audited by the other auditor, the principal auditor should express a qualified opinion or disclaimer of opinion because there is a limitation in the scope of the audit.

Effective date

This Statement is effective from 31 December, 1999.