Understanding SSA 600 in Group Audits: What Singapore Businesses Should Know
As Singapore businesses expand and grow across borders or into multiple subsidiaries, group structures become increasingly common. With this complexity comes the need for consolidated financial statements and the audits that accompany them. One of the most important standards governing the audit of group financial statements is Singapore Standard on Auditing (SSA) 600: Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors).
For companies operating under a group structure, and for audit firms like https://www.auditservices.sg, understanding SSA 600 is critical in ensuring that the audit process is compliant, comprehensive, and well-coordinated.
In this article, we explore what SSA 600 entails, how it applies to group audits in Singapore, the responsibilities of the group auditor, and how businesses can benefit from a well-executed group audit.
What is SSA 600?
SSA 600 is a key auditing standard issued by the Institute of Singapore Chartered Accountants (ISCA) based on the international auditing standards. It provides guidance on how to conduct audits of group financial statements, which include the financial information of more than one component—typically a parent company and its subsidiaries.
The standard specifically addresses situations where component auditors (auditors other than the group engagement team) are involved in the audit process. SSA 600 outlines the responsibilities of the group auditor, how to coordinate with component auditors, and how to form an overall opinion on the group’s consolidated financial statements.
When is SSA 600 Applicable?
SSA 600 applies when a company prepares group financial statements—that is, financial statements that consolidate the financials of a parent and its subsidiaries.
It becomes especially relevant when:
- Subsidiaries are located overseas or in other jurisdictions
- Different auditors are engaged to audit specific components of the group
- The group has diverse or complex operations spread across industries or geographies
- The audit team needs to rely on the work of component auditors
In these cases, the group auditor must apply SSA 600 to manage the risks, ensure quality, and issue an opinion that covers the entire group.
Objectives of SSA 600
The primary objectives of SSA 600 are to:
- Ensure the group auditor takes overall responsibility for the audit opinion on the group financial statements.
- Establish clear communication and coordination between the group engagement team and component auditors.
- Ensure that adequate audit evidence is obtained regarding the financial information of components.
- Assess the risks of material misstatement at both the group and component levels.
- Address the documentation and reporting responsibilities during a group audit.
Key Responsibilities of the Group Auditor
Under SSA 600, the group engagement partner (typically the lead auditor from the main audit firm) has several crucial responsibilities:
1. Understanding the Group and Its Components
The group auditor must obtain a comprehensive understanding of the group’s structure, control environment, financial reporting system, and the significance of each component.
2. Risk Assessment
The auditor must assess risks of material misstatements in the group financial statements, including those arising from specific components. Particular attention is paid to significant components, which could individually have a material impact on the group’s financials.
3. Determining Materiality
Materiality must be established at both the group and component levels. This affects the scope of audit procedures and the evaluation of audit findings.
4. Engaging with Component Auditors
The group auditor must:
- Communicate clearly with component auditors about their scope of work, deadlines, and reporting requirements
- Evaluate their competence, independence, and ethical compliance
- Review the work performed and conclusions reached by the component auditors
5. Evaluating Consolidation Process
The group auditor must audit the consolidation adjustments and disclosures made by management. This includes eliminating intercompany balances and transactions, as well as handling foreign currency translations and goodwill allocations.
6. Forming the Group Audit Opinion
The group auditor ultimately forms the audit opinion on the consolidated financial statements, based on the combined audit evidence, including work done by component auditors.
Importance of SSA 600 in the Singapore Context
In Singapore, many companies operate as part of a group structure, particularly in industries like:
- Real estate and construction (with multiple SPVs or project entities)
- Retail and franchise operations
- Investment holdings and venture capital
- Logistics and manufacturing with regional subsidiaries
SSA 600 ensures that audits in such environments are robust, transparent, and consistent across all components—regardless of geographical or operational differences.
By adhering to SSA 600, auditors in Singapore also meet their obligations under the Companies Act, comply with ACRA’s audit quality expectations, and help businesses maintain their reputation with regulators and investors.
Challenges in Implementing SSA 600
Despite its importance, applying SSA 600 presents several challenges:
- Coordination difficulties with component auditors, especially across time zones or jurisdictions
- Language and regulatory differences in foreign subsidiaries
- Assessing the reliability of work done by other auditors
- Data access restrictions in certain countries or systems
- Time pressure in meeting group reporting deadlines
That’s why it’s essential to work with a seasoned audit firm like https://www.auditservices.sg, which understands the nuances of group audits and has experience coordinating multi-entity audits effectively.
How AuditServices.sg Supports Group Audits with SSA 600
At https://www.auditservices.sg, we specialise in group audits and the application of SSA 600. Our services include:
- End-to-end audit planning and execution for group structures
- Seamless coordination with component auditors, both locally and internationally
- In-depth evaluation of consolidation adjustments and intercompany transactions
- Clear and regular reporting to management and audit committees
- Timely delivery of audit opinions for statutory filing or investor presentation
Our team is experienced in handling both small-to-medium enterprise (SME) groups and larger, more complex corporate structures.
Conclusion
SSA 600 plays a critical role in ensuring that group audits in Singapore are conducted in a structured, transparent, and risk-conscious manner. It provides the framework that group auditors must follow to produce a credible opinion on the consolidated financial statements.
For business owners and CFOs, understanding the importance of SSA 600 can help ensure that your group audit is handled with care and professionalism. At https://www.auditservices.sg, we bring extensive experience, technical expertise, and attention to detail to every group audit we conduct.