Document ID: chunk:federal_register_of_legislation:F2025C00096:body:0:p30
Version: federal_register_of_legislation:F2025C00096
Segment Type: other
Provision Reference: 
Character Range: 86134–89114

internal control of the component that could have an effect on the risks of material misstatement of the group financial report.

 2.          ASA 300[52] requires the engagement partner and other key members of the engagement team to be involved in planning the audit.  When component auditors are involved, one or more individuals from a component auditor may be key members of the engagement team and therefore involved in planning the group audit.  The involvement of component auditors in planning the audit draws on their experience and insight, thereby enhancing the effectiveness and efficiency of the planning process.  The group engagement partner uses professional judgement in determining which component auditors to involve in planning the audit.  This may be affected by the nature, timing and extent to which the component auditors are expected to be involved in designing and performing risk assessment or further audit procedures.

 3.          As described in ASQM 1,[53] there may be circumstances when the fee quoted for an engagement is not sufficient given the nature and circumstances of the engagement, and it may diminish the firm's ability to perform the engagement in accordance with professional standards and applicable legal or regulatory requirements.  The level of fees, including their allocation to component auditors, and the extent to which they relate to the resources required, may be a special consideration for group audit engagements. For example, in a group audit, the firm's financial and operational priorities may place constraints on the determination of the components at which audit work will be performed, as well as the resources needed, including the involvement of component auditors.  In such circumstances, these constraints do not override the group engagement partner's responsibility for achieving quality at the engagement level or the requirements for the group auditor to obtain sufficient appropriate audit evidence on which to base the group audit opinion.

Considerations When Component Auditors Are Involved

Sufficient and Appropriate Involvement in the Work of the Component Auditor (Ref: Para. 23–24)

 1.          In evaluating whether the group auditor will be able to be sufficiently and appropriately involved in the work of the component auditor, the group auditor may obtain an understanding of whether the component auditor is subject to any restrictions that limit communication with the group auditor, including with regard to sharing audit documentation with the group auditor.  The group auditor may also obtain an understanding about whether audit evidence related to components located in a different jurisdiction may be in a different language and may need to be translated for use by the group auditor.

 2.          If the component auditor is unable to cooperate with the group auditor, the group auditor may:

           * Request the component auditor to provide its rationale.

           * Be