Document ID: chunk:federal_register_of_legislation:F2023C00341:reg:4:p9
Version: federal_register_of_legislation:F2023C00341
Segment Type: reg
Provision Reference: reg 4 (pt 9/42)
Character Range: 33303–36507

of the group financial report.  Based on its understanding of the component auditor, the group engagement team shall determine whether it is necessary to be involved in the further audit procedures.

Consolidation Process

32.               In accordance with paragraph 17 of this Auditing Standard, the group engagement team obtains an understanding of group‑wide controls and the consolidation process, including the instructions issued by group management to components.  In accordance with paragraph 25 of this Auditing Standard, the group engagement team, or component auditor at the request of the group engagement team, tests the operating effectiveness of group‑wide controls if the nature, timing and extent of the work to be performed on the consolidation process are based on an expectation that group‑wide controls are operating effectively, or if substantive procedures alone cannot provide sufficient appropriate audit evidence at the assertion level.

33.               The group engagement team shall design and perform further audit procedures on the consolidation process to respond to the assessed risks of material misstatement of the group financial report arising from the consolidation process.  This shall include evaluating whether all components have been included in the group financial report.

34.               The group engagement team shall evaluate the appropriateness, completeness and accuracy of consolidation adjustments and reclassifications, and shall evaluate whether any fraud risk factors or indicators of possible management bias exist.  (Ref: Para. A56)

35.               If the financial information of a component has not been prepared in accordance with the same accounting policies applied to the group financial report, the group engagement team shall evaluate whether the financial information of that component has been appropriately adjusted for purposes of preparing and presenting the group financial report.

36.               The group engagement team shall determine whether the financial information identified in the component auditor's communication, see paragraph 41(c) of this Auditing Standard, is the financial information that is incorporated in the group financial report.

37.               If the group financial report includes the financial report of a component with a financial reporting period‑end that differs from that of the group, the group engagement team shall evaluate whether appropriate adjustments have been made to the financial report in accordance with the applicable financial reporting framework.

Subsequent Events

38.               Where the group engagement team or component auditors perform audits on the financial information of components, the group engagement team or the component auditors shall perform procedures designed to identify events at those components that occur between the dates of the financial information of the components and the date of the auditor's report on the group financial report, and that may require adjustment to or disclosure in the group financial report.

39.               Where component auditors perform work other than audits of the financial information of components,