A joint audit is not simply two audit firms doing parallel work and signing the same report at the end. Under ICAI's Revised SA 299, the joint auditors must plan together, divide and document the work, communicate risks and conclusions, understand where responsibility is individual and where it is shared, and coordinate the final report. The standard is especially useful for large or multi-location engagements where the audit is deliberately split between two or more auditors.
ICAI's current Engagement and Quality Control Standards repository lists Revised SA 299, and the detailed requirements are in the official Revised SA 299 text. The standard is effective for audits of financial statements for periods beginning on or after 1 April 2018.
What is a joint audit under SA 299?
SA 299 defines a joint audit as an audit of an entity's financial statements by two or more auditors appointed with the objective of issuing the audit report. That differs from a principal auditor using another auditor's work for a component. Revised SA 299 expressly says it does not deal with that principal-auditor and component-auditor relationship.
Step 1: Build one strategy and joint audit plan
Key engagement-team members from each joint auditor must participate in planning. The joint auditors jointly establish the overall audit strategy covering scope, timing and direction and, before the audit starts, discuss and develop the joint audit plan.
The plan should identify both divided areas and common areas. The application guidance says work can usually be divided by identifiable units or specified areas. Where that is not practical, allocation may instead be by assets, liabilities, income or expenditure. Some important matters may remain common and be covered by all joint auditors.
Each joint auditor also assesses risks of material misstatement relevant to the overall financial statements and allocated areas, communicates those risks to the other joint auditors and documents them. Allocation should therefore not turn the audit into isolated silos.
Step 2: Document the work allocation
SA 299 requires the joint auditors to discuss and document the nature, timing and extent of procedures for common and specifically allotted areas. After work is identified and allocated, the work-allocation document must be signed by all joint auditors and communicated to those charged with governance. The joint auditors must also obtain a common engagement letter and common management representation letter.
A practical allocation checklist
- State the locations, processes, accounts or audit areas assigned to each joint auditor.
- Identify areas that remain common to all joint auditors.
- Set the timetable for risk communication, cross-cutting findings and completion conclusions.
- Make clear who performs the specific procedures in each allocated area.
SA 299 does not prescribe this exact checklist, but these points make the required division of work usable in the audit file and reduce scope disputes.
Step 3: Separate individual from joint responsibility
For divided work, each joint auditor is responsible for the work allocated to that auditor, including proper execution of the procedures. Each auditor also determines the nature, timing and extent of procedures for allocated areas and is individually responsible for evaluating internal control and risk relating to those areas.
Responsibility is not completely compartmentalised. SA 299 makes all joint auditors jointly and severally responsible for specified common matters, including undivided work performed by all, common planning decisions about procedures, matters brought to all joint auditors and agreed by them, examining statutory compliance of the financial statements, presentation and disclosure under the applicable reporting framework, and ensuring that the audit report complies with relevant statutes, Standards on Auditing and other ICAI pronouncements.
A useful working rule is: allocated execution can be individual, while specified common and overall reporting responsibilities remain shared.
Step 4: Communicate findings across allocation boundaries
A finding in one area may affect another auditor's work or the financial statements as a whole. SA 299 requires a joint auditor who encounters a matter relevant to another joint auditor's area, or a matter requiring disclosure, discussion or judgment by the other joint auditors, to communicate it to all the other joint auditors in writing before completion of the audit.
Worked example: two auditors across multiple locations
Assume Joint Auditor A is allocated the North-region units and Joint Auditor B the South-region units, while consolidation, financial-statement presentation and final reporting are common areas. Both agree the strategy, risk approach, timetable and allocation before fieldwork, sign the allocation document and communicate it to those charged with governance.
During testing, B identifies an unusual transaction that may require entity-wide disclosure. Even though the transaction arose in B's region, B should communicate it in writing to A before completion because it affects a common financial-statement judgment. They then assess the disclosure and reporting consequence together. Work allocation is therefore a division of execution, not a barrier to information flow.
Must one joint auditor review the other's work?
SA 299 states that each joint auditor is entitled to assume that the other joint auditors have carried out their respective work in accordance with ICAI's Standards on Auditing, and it is not necessary to review the other joint auditor's work or perform tests merely to establish that fact. The standard also allows an assumption that other joint auditors have communicated departures from the reporting framework or significant observations relevant to the recipient auditor's responsibilities.
That does not remove the explicit coordination duties. Risks, cross-cutting matters and final conclusions still have to be communicated as required.
What if the joint auditors disagree?
The normal outcome is a common audit report. But SA 299 does not make a majority view binding on a dissenting joint auditor. If the joint auditors disagree about the opinion or a matter to be covered in the report, the auditor with a different view must express that opinion in a separate audit report. The separate reports refer to the other joint auditor's report through an Other Matter paragraph in accordance with Revised SA 706.
Before finalising reporting, the joint auditors must discuss and communicate their respective conclusions. Where a modified opinion, Emphasis of Matter paragraph or Other Matter paragraph is expected, the standard also requires the relevant communication with those charged with governance.
Practical SA 299 file checklist
- Confirm the engagement is a joint audit and not a principal-component auditor arrangement.
- Agree one overall audit strategy and joint audit plan with key members from every joint auditor.
- Identify divided and common areas, document relevant risks and sign the work-allocation document.
- Communicate the allocation to those charged with governance and use common engagement and representation letters.
- Share cross-cutting matters in writing before audit completion.
- Document which responsibilities are individual and which are joint and several.
- Discuss final conclusions before reporting and follow the separate-report rules if disagreement remains.
Common mistakes to avoid
- Splitting work informally without a signed allocation document.
- Treating each allocated area as a closed silo and failing to share cross-cutting findings.
- Assuming every responsibility is divided merely because fieldwork is divided.
- Waiting until report-signing day to resolve a material reporting disagreement.
- Confusing SA 299 joint audit with use of another auditor's component work.
Practical takeaway
Revised SA 299 works best when allocation is precise but coordination remains strong. Agree the strategy together, document divided and common areas, sign and communicate the allocation, keep cross-cutting findings moving between teams, and understand which responsibilities are individual and which are shared. Before applying the framework on a live engagement, recheck ICAI's official Revised SA 299 and the current standards repository.
