Supporting International Standards

SMPAG Response to the IESBA's Proposed Revisions to the Code Related to the Definition of Engagement Team and Group Audits

May 23, 2022 | Comment Letters
6 Pages

The IFAC SMP Advisory Group (SMPAG) is pleased to respond to the IESBA Exposure Draft on Proposed Revisions to the Code Relating to the Definition of Engagement Team and Group Audits.

In our letter, we agree that aligning the IAASB and IESBA definitions and clarifying what the term "the relevant ethical requirements" means in the context of the group auditor's responsibilities under ISA 600 (Revised) as explained in proposed 405.2A1 is helpful. However, concerns were raised about expanding the scope of the proposed definitions, noting this now widens the net to all individual professional accountants involved in group audits and also expands the scope to address when independence would be required for firms in group audit situations. The proposed requirement of R405.10 regarding group audits that are public interest entities is also particularly concerning for SMPs and could force them out of the component audit market. The SMPAG believes the Board should strongly consider the SMP view on this matter as there is a risk the IESBA proposals could exacerbate market concentration issues, which are already of concern in some jurisdictions.


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