Group Audit

• What is the requirement for a holding company regarding group accounts?

  To prepare consolidated accounts
• What opinion must the group engagement partner express?

  Whether accounts show a true and fair view
• What does ISA 600 address in group audits?

  Special considerations for group audits
• Who may be required to express an audit opinion on a component's financial statements?

  Component auditor
• What is the responsibility of the group engagement partner?

  Direction, supervision, and performance of the audit
• What are the objectives of the auditor in group audits?

  To determine and communicate with component auditors
• What is the twofold objective of the group auditor?

  To act as group auditor and gather evidence
• What are the three stages in a group audit process?

  1. Gathering evidence on components
  2. Auditing the consolidation
  3. Issuing the group audit opinion
• What is a joint audit?

  When two audit firms provide an opinion together
• What is a benefit of joint auditing in group audits?

  Retaining the existing audit firm of a new component
• What rights does the group engagement partner have?

  Access to records and require information
• What factors should be considered when accepting the appointment as group engagement partner?

  Materiality, knowledge, and risk of misstatement
• What must be assessed when relying on the work of a component auditor?

  Ethical compliance and professional competence
• What should the group engagement partner check if the component auditor's work is questionable?

  Documentation, adequacy of audit programs, and scope
• What is the scope of work for the group engagement partner based on?

  Scope of work of component auditor and past issues
• What procedures should the group engagement partner perform to obtain sufficient evidence?

  1. Obtain schedule of investment in subsidiaries
  2. Verify accounting treatment for gains/losses
  3. Confirm existence and ownership of investments
  4. Review audited accounts of each component
• What detailed audit work should the group engagement partner check?

  Consolidation figures and inter-company transactions
• What should questionnaires to other auditors confirm?

  Internal controls and accounting policies
• What should the group engagement partner review in component auditors' working papers?

  System examination and documentation of the audit
• What should be documented for significant findings of component auditors?

  Financial statements and significance of findings
• What responsibilities does the group engagement partner have in reporting?

  Names of subsidiaries and audit qualifications
• What challenges may the group engagement partner face with foreign subsidiaries?

  Language, culture, and accounting differences