What is the group engagement team?
On most group audits, the hardest coordination challenge is not performing the work but keeping control of it. ISA 600 (Revised).16 addresses this by requiring the group engagement team (GET) to obtain an understanding of the group and its components sufficient to identify and assess risks of material misstatement in the group financial statements. That understanding drives every scoping decision: which components need targeted procedures, what component materiality levels to set, which component auditors (CAs) to involve, and what form the group audit instructions should take.
Responsibilities do not end at planning. ISA 600 (Revised).40 requires the GET to communicate with CAs throughout the engagement, not just by issuing instructions at the start. At completion, the GET evaluates whether work performed by CAs, combined with work performed directly on the consolidation, provides sufficient appropriate audit evidence for the group audit opinion. If gaps exist, the GET requests additional work from CAs or performs additional procedures itself.
Key Points
- GET members sit at the group auditor's firm, not at the component level.
- Setting the group audit strategy, determining component materiality, scoping every component, and evaluating CA work are all GET responsibilities.
- CAs are not part of the GET, even within the same network firm.
- ISA 600 (Revised) increased the GET's responsibility for direct risk assessment across the entire group.
Worked example: Ferreira Logistics S.A.
Client: Portuguese logistics group, FY2024, consolidated revenue €60M, IFRS reporter, two operating subsidiaries in Portugal and one in Spain.
Establish the group audit strategy
At the Lisbon office, the GET (a GEP and two seniors) identifies revenue recognition across all three components as the primary risk area. Because the Spanish subsidiary accounts for 35% of consolidated revenue (€21M) and uses a separate accounting system, it warrants a distinct risk assessment rather than a SALY carry-forward from last year.
Determine component materiality
Group materiality is set at €600K (1% of revenue). For the Spanish subsidiary, component materiality is €360K (60% of group materiality). A combined component materiality of €420K (70% of group materiality) covers the two Portuguese subsidiaries because the GET performs audit work on them directly.
Communicate with the Spanish CA
Group audit instructions specify risk areas, component materiality, reporting deadlines, and the form of the CA's communication. A planning call with the CA follows to discuss intercompany pricing risk.
Evaluate at completion
The GET reviews the Spanish CA's report and identifies one unadjusted misstatement of €45K in intercompany revenue cut-off, which it aggregates with group-level findings. Total unadjusted misstatements come to €127K, below group materiality of €600K.
What reviewers and practitioners get wrong
Too often, the GET treats its role as administrative rather than substantive. Instructions go out, reports come back, and nobody critically evaluates what is in them. ISA 600 (Revised).42 requires the GET to evaluate whether the CA's work is adequate. Filing a report is not evaluating it. In our experience, this is the procedure nobody enjoys, but skipping it is how files get flagged.
On smaller group audits where the GET also performs work on most components, we think the most common mistake is failing to distinguish between the GET role and the role of auditor of individual components. Documentation should make this distinction clear: group-level risk assessment, component materiality determination, consolidation procedures, and evaluation of CA reports are all GET responsibilities. Mixing these with component-level WPs obscures the file structure and invites review notes.
Key standard references
- ISA 600 (Revised).14(i) defines the GET.
- ISA 600 (Revised).16 requires the GET to obtain an understanding of the group and its components.
- ISA 600 (Revised).30 requires the GET to determine component materiality.
- ISA 600 (Revised).40 requires ongoing communication with CAs.
- ISA 600 (Revised).42 requires the GET to evaluate whether CA work is adequate.
Related terms
Related reading
Frequently asked questions
Are component auditors part of the group engagement team?
No. ISA 600 (Revised) defines the GET as the GEP and staff at the group auditor's firm. CAs are not part of the GET, even if they belong to the same network firm. They perform work under the GET's direction but remain separate.
What happens if the group engagement team does not evaluate component auditor work?
Filing a CA's report is not the same as evaluating it. ISA 600 (Revised).42 requires the GET to evaluate whether the CA's work is adequate. Without that evaluation, the group audit file lacks evidence that the GET exercised the judgment the standard requires.