CHAP 8 GROUP AND TRANSNATIONAL AUDITS.pptx

PPT about group and transnational audit

1. GROUP AND TRANSNATIONAL AUDITS

2. GROUP AUDITS Still the same as the audit of a single company Specific considerations: Require numerous and potentially complicated consolidation adjustments Specific accounting standards relating to group financial statements must be complied with The components of the group may be audited by firms other than the group auditor The organisation and planning of a group audit may be significantly more complex than for a single company

3. If acting as the auditor of the group financial statements: Communicate clearly with the component auditors about the scope and timing of their work on financial information Obtain sufficient appropriate evidence regarding the financial information

4. CONSIDERATION OF ACCEPTANCE AS GROUP AUDITOR Whether sufficient appropriate audit evidence can reasonably be expected to be obtained in relation to the consolidation process and the financial information of the components of the group Where component auditors are involved, the engagement partner shall evaluate whether the group engagement team will be able to be involved in the work of the component auditors

5. CONSIDERATION OF ACCEPTANCE AS COMPONENT AUDITOR Whether they are independent of the parent and component companies and can comply with ethical requirements Whether they possess any special skills necessary to perform the audit and competent to perform the work Whether they have an understanding of the auditing standards and can comply with them Whether they have an understanding of the relevant financial reporting framework applicable to the group Whether they can comply with the group audit team instructions including the deadlines Whether they are willing to have the group auditor involved in their work and evaluate it before relying on it for group audit purposes

6. OVERALL AUDIT STRATEGY AND PLAN Obtaining an understanding of the group, its components and their environments; the component auditor; the consolidation process Setting materiality for the group including the components Responding to assessed risks, including consideration of whether a component is significant Subsequent events review in relation to the group

7. UNDERSTANDING THE GROUP, ITS COMPONENTS AND THEIR ENVIRONMENTS