Whenever auditing requirements change – especially if they add to workloads – clear, practical guidance is essential. 

ICAEW’s Auditing in a Group Context: Practical Considerations for Auditors was published in August 2025. The guide aims to help auditors navigate the revised ISA (UK) 600 standard, which covers audits of group financial statements. The revised standard is effective for periods beginning on or after 15 December 2023.

Producing the guide was a challenge, but a worthwhile one, according to Katharine Bagshaw FCA, Senior Manager, Auditing Standards, Auditing and Assurance, ICAEW: “It’s a detailed guide to help firms manage major change, so it was important to get it right – we couldn’t have done it without the assistance of the working group, which was chaired very ably by Catherine Hardinge.”

“It’s a long document, but it covers a lot of ground – as did the previous edition,” Bagshaw explains. “But despite its length, it’s easy to find specific information. It’s the kind of guide you can dip in and out of.”

Jez Williams FCA, Training Director, Apex, supports moves to increase awareness of the guide: “I’m mainly dealing with mid-tier firms but with some smaller firms too. Although the technical teams at mid-tier firms are aware of the guidance, my impression when I have covered this on courses is that it is slow to percolate to front-line audit staff.”

The key changes

The revised ISA (UK) 600 introduces a more integrated, risk-based approach to group audits, which is summarised in the guide. Key changes for auditors include:

Elimination of significance categories: The previous distinction between "significant" and "non-significant" components is removed in favour of a risk-based approach to all components.

Expanded component definition: A component can be a business unit, function, branch or shared service centre, even if it is not a legally distinct entity.

Enhanced group auditor responsibility: The group engagement partner has overall responsibility for the group audit, including the work performed by component auditors.

Component auditors are now formally considered part of the group engagement team.

Focus on aggregation risk: This is the risk that the total of uncorrected and undetected misstatements exceeds group materiality. Auditors must set component performance materiality lower than group performance materiality to address this risk.

Component auditor evaluation and access to working papers: Group auditors must rigorously evaluate the component auditors' competence and independence, regardless of network affiliation. The group auditor requires full access to component auditor documentation, required for UK auditors under the Companies Act 2006, but also for non-UK auditors.

Documentation requirements: Audit files must, as before, demonstrate that sufficient appropriate evidence was obtained to support the group audit opinion. Documentation should record the group auditor's thought processes, evaluation of significant judgements, and restrictions on access to information.

Consistency: The file should tell a consistent story, connecting planned work to the final results and conclusions. The group auditor must evaluate whether the evidence provided by component auditors is sufficient to support the group opinion.

Formatting: Component auditors should report their findings to the group auditor in agreed formats, such as memoranda of work performed or formal audit reports. Reports typically focus on financial information prepared for consolidation rather than full financial statements.

Managing complex scenarios: The guide addresses complex scenarios, including non-coterminous year ends and structures where signing and fieldwork responsibilities are split across jurisdictions.

What this means

Catherine Hardinge, the working group’s chair and partner at Price Bailey, hopes the guide will aid communication in auditing teams: “Where you have component auditors as part of the group audit team, regular and clear communication is very important.”

“The communication needs to be two-way, with clear instructions early on, explaining what you are going to need from them and deadlines,” Hardinge explains. “They also need to keep you updated if issues arise on a timely basis.”

The guide has been well-received in the auditing community. Peter Beard, ACA BFP, Founder at GenFinance AI, described the insights in the guide as “fantastic, especially the focus on the changing nature of group audits.”

“As group structures grow more complex, the demands on consolidation processes and risk assessments are more labour-intensive than ever,” says Beard. “It’s a pivotal time for finance leaders to reevaluate their systems and processes to stay ahead of these changes.”

Williams says the main topics of interest arising on Apex’s ISA (UK) 600 courses are work scoping – especially “how to calculate component PM and how this interacts with ‘local’ statutory audit planning for components subject to full audit” – and effectively documenting group audits within paperless methodologies.

He adds that on these topics, course participants “appreciate the pragmatic approach in the ICAEW guidance.”