Document ID: chunk:federal_register_of_legislation:F2025C00096:body:0:p53
Version: federal_register_of_legislation:F2025C00096
Segment Type: other
Provision Reference: 
Character Range: 152123–155334

the Adequacy of Their Work

Communication about Matters Relevant to the Group Auditor's Conclusion with Regard to the Group Audit (Ref: Para. 45)

 1.       Although the matters required to be communicated in accordance with paragraph 45 are relevant to the group auditor's conclusion with regard to the group audit, certain matters may be communicated during the course of the component auditor's procedures.  In addition to the matters in paragraphs 32 and 50, such matters may include, for example:

           * Information about breaches of relevant ethical requirements, including identified breaches of independence provisions;

           * Information about instances of non-compliance with laws or regulations;

           * Newly arising significant risks of material misstatement, including risks of fraud;

           * Identified or suspected fraud or illegal acts involving component management or employees that could have a material effect on the group financial report; or

           * Significant and unusual transactions.

Communication of Misstatements of Component Financial Information (Ref: Para. 45(e))

 1.       Knowledge about corrected and uncorrected misstatements across components may alert the group auditor to potential pervasive internal control deficiencies, when considered along with the communication of deficiencies in accordance with paragraph 45(g).  In addition, a higher than expected number of identified misstatements (uncorrected or corrected) may indicate a higher risk of undetected misstatements, which may lead the group auditor to conclude that additional audit procedures need to be performed at certain components.

Component Auditor's Overall Findings or Conclusions (Ref: Para. 45(k))

 1.       The form and content of the deliverables from the component auditor are influenced by the nature and extent of the audit work the component auditor has been requested to perform.  The group auditor's firm policies or procedures may address the form or specific wording of an overall conclusion from the component auditor on the audit work performed for purposes of the group audit.  In some cases, law or regulation may specify the form of conclusion (e.g., an opinion) to be provided by the component auditor.

Evaluating Whether Communications with the Component Auditor Are Adequate for the Group Auditor's Purposes (Ref: Para. 46(b))

 1.       If the group auditor determines that the component auditor's communications are not adequate for the group auditor's purposes, the group auditor may consider whether, for example:

           * Further information can be obtained from the component auditor (e.g., through further discussions or meetings);

           * It is necessary to review additional component auditor audit documentation in accordance with paragraph 47;

           * Additional audit procedures may need to be performed in accordance with paragraph 48; or

           * There are any concerns about the component auditor's competence or capabilities.

Reviewing Additional Component Auditor Audit Documentation (Ref: Para. 47)

 1.       Paragraph A75 provides guidance for the group auditor in tailoring the nature, timing and extent