Document ID: chunk:federal_register_of_legislation:F2025C00096:body:0:p49
Version: federal_register_of_legislation:F2025C00096
Segment Type: other
Provision Reference: 
Character Range: 140619–143731

controls are designed and operating in a consistent way.

 2.       When further audit procedures are performed centrally, component auditors may still be involved.  For example, when the group has multiple shared service centres, the group auditor may involve component auditors in the performance of further audit procedures for these shared service centres.

Performing Further Audit Procedures at the Component Level

 1.       In other circumstances, procedures to respond to the risks of material misstatement of the group financial report that are related to the financial information of a component may be more effectively performed at the component level.  This may be the case when the group has:

           * Different revenue streams;

           * Multiple lines of business;

           * Operations across multiple locations; or

           * Decentralised systems of internal control.

Large Number of Components Whose Financial Information Is Individually Immaterial but Material in the Aggregate to the Group Financial Report

 1.       A group may be comprised of a large number of components whose financial information is individually immaterial but material in the aggregate to the group financial report.  Circumstances such as these in which the significant classes of transactions, account balances or disclosures in the group financial report are disaggregated over a large number of components may present additional challenges for the group auditor in planning and performing further audit procedures.

 2.       In some cases, it may be possible to obtain sufficient appropriate audit evidence by performing further audit procedures centrally on these significant classes of transactions, account balances or disclosures (e.g., if they are homogeneous, subject to common controls and access to appropriate information can be obtained). The further audit procedures may also include substantive analytical procedures in accordance with ASA 520.[84] Depending on the circumstances of the engagement, the financial information of the components may be aggregated at appropriate levels for purposes of developing expectations and determining the amount of any difference of recorded amounts from expected values in performing the substantive analytical procedures.  The use of automated tools and techniques may be helpful in these circumstances.

 3.       In other cases, it may be necessary to perform further audit procedures at selected components to address the risks of material misstatement of the group financial report.  The determination of the components at which audit procedures are to be performed, and the nature, timing and extent of further audit procedures to be performed at the selected components, are matters of professional judgement.  In these circumstances, introducing an element of unpredictability in the components selected for testing also may be helpful in relation to the risks of material misstatement of the group financial report due to fraud (also see paragraph A136).

The Nature and Extent of Further Audit Procedures

 1.       In response to the