Document ID: chunk:federal_register_of_legislation:F2023C00341:reg:4:p29
Version: federal_register_of_legislation:F2023C00341
Segment Type: reg
Provision Reference: reg 4 (pt 29/42)
Character Range: 91253–94350

by the group engagement team may be sufficient to communicate matters relevant to the group engagement team's conclusion set out in paragraph 41.

Evaluating the Sufficiency and Appropriateness of Audit Evidence Obtained

Reviewing the Component Auditor's Audit Documentation (Ref: Para. 42(b))

A61.         What parts of the audit documentation of the component auditor will be relevant to the group audit may vary depending on the circumstances.  Often the focus is on audit documentation that is relevant to the significant risks of material misstatement of the group financial report.  The extent of the review may be affected by the fact that the component auditor's audit documentation has been subjected to the component auditor's firm's review procedures.

Sufficiency and Appropriateness of Audit Evidence (Ref: Para. 44‑45)

A62.         If the group engagement team concludes that sufficient appropriate audit evidence on which to base the group audit opinion has not been obtained, the group engagement team may request the component auditor to perform additional procedures.  If this is not feasible, the group engagement team may perform its own procedures on the financial information of the component.

A63.         The group engagement partner's evaluation of the aggregate effect of any misstatements (either identified by the group engagement team or communicated by component auditors) allows the group engagement partner to determine whether the group financial report as a whole is materially misstated.

Communication with Group Management and Those Charged with Governance of the Group

Communication with Group Management (Ref: Para. 46‑48)

A64.         ASA 240 contains requirements and guidance on communication of fraud to management and, where management may be involved in the fraud, to those charged with governance.[24]

A65.         Group management may need to keep certain material sensitive information confidential.  Examples of matters that may be significant to the financial report of the component of which component management may be unaware include the following:

           * Potential litigation.

           * Plans for abandonment of material operating assets.

           * Subsequent events.

           * Significant legal agreements.

Communication with Those Charged with Governance of the Group (Ref: Para. 49)

A66.         The matters the group engagement team communicates to those charged with governance of the group may include those brought to the attention of the group engagement team by component auditors that the group engagement team judges to be significant to the responsibilities of those charged with governance of the group.  Communication with those charged with governance of the group takes place at various times during the group audit.  For example, the matters referred to in paragraph 49(a)‑(b) may be communicated after the group engagement team has determined the work to be performed on the financial information of the components.  On the other hand, the matter referred to in paragraph 49(c) may be communicated