Document ID: chunk:federal_register_of_legislation:F2023C00341:reg:4:p11
Version: federal_register_of_legislation:F2023C00341
Segment Type: reg
Provision Reference: reg 4 (pt 11/42)
Character Range: 39003–42351

to the group audit.  Such communication shall include:  (Ref: Para. A60)

(a)                Whether the component auditor has complied with ethical requirements that are relevant to the group audit, including independence and professional competence;

(b)                Whether the component auditor has complied with the group engagement team's requirements;

(c)                Identification of the financial information of the component on which the component auditor is reporting;

(d)                Information on instances of non‑compliance with laws or regulations that could give rise to a material misstatement of the group financial report;

(e)                A list of uncorrected misstatements of the financial information of the component (the list need not include misstatements that are below the threshold for clearly trivial misstatements communicated by the group engagement team, see paragraph 40(c) of this Auditing Standard);

(f)                 Indicators of possible management bias;

(g)                Description of any identified significant deficiencies in internal control at the component level;

(h)                Other significant matters that the component auditor communicated or expects to communicate to those charged with governance of the component, including fraud or suspected fraud involving component management, employees who have significant roles in internal control at the component level or others where the fraud resulted in a material misstatement of the financial information of the component;

(i)                 Any other matters that may be relevant to the group audit, or that the component auditor wishes to draw to the attention of the group engagement team, including exceptions noted in the written representations that the component auditor requested from component management; and

(j)                 The component auditor's overall findings, conclusions or opinion.

Evaluating the Sufficiency and Appropriateness of Audit Evidence Obtained

Evaluating the Component Auditors' Communication and Adequacy of their Work

42.               The group engagement team shall evaluate the component auditor's communication, see paragraph 41 of this Auditing Standard.  The group engagement team shall:

(a)                Discuss significant matters arising from that evaluation with the component auditor, component management or group management, as appropriate; and

(b)                Determine whether it is necessary to review other relevant parts of the component auditor's audit documentation.  (Ref: Para. A61)

43.               If the group engagement team concludes that the work of the component auditor is insufficient, the group engagement team shall determine what additional procedures are to be performed, and whether they are to be performed by the component auditor or by the group engagement team.

Sufficiency and Appropriateness of Audit Evidence

44.               The auditor is required to obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level and thereby enable the auditor to draw reasonable conclusions on which to base the auditor's opinion.[11]  The group engagement team shall evaluate whether sufficient appropriate audit evidence has been obtained from the audit procedures performed on the consolidation process