Document ID: chunk:federal_register_of_legislation:F2022L00712:body:0:p9
Version: federal_register_of_legislation:F2022L00712
Segment Type: other
Provision Reference: 
Character Range: 24428–27510

the physical inventory count at multiple locations, the nature and extent of direction and supervision of component auditors and the review of theirother auditors' work in the case of group audits, or the audit budget in hours to allocate to high risk areas;

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27.               Existing Appendix 1 is amended to read as follows:

CONSIDERATIONS IN ESTABLISHING THE OVERALL AUDIT STRATEGY

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Characteristics of the Engagement

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           * The expected audit scopecoverage, including the number and locations of components at which audit work is expected to be performed for purposes of a group audit, and the extent to which component auditors will be involvedto be included.

           * The nature of the control relationships between a parent and its entities or business unitscomponents that determine how the group is to be consolidated.

           * The extent to which components are audited by other auditors.

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           * The requirementneed for an audit of a financial report for statutory, regulatory or other reasons, audit of a stand-alone financial report in addition to an audit work performed for consolidation purposes of a group audit.

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Reporting Objectives, Timing of the Audit, and Nature of Communications

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           * Communication with component auditors of components regarding the expected types and timing of reports to be issued and other communications in connection with the audit work performed for purposes of the group auditof components.

           * The expected nature and timing of communications among engagement team members, including the nature and timing of team meetings and timing of the review of audit work performed.

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Significant Factors, Preliminary Engagement Activities, and Knowledge Gained on Other Engagements

           * The determination of materiality in accordance with ASA 32016 and, where applicable:

                   + The determination of component performance materiality for components and communication thereof to component auditors in accordance with ASA 600.[17]

                   + The initial expectations about the preliminary identification of significant components and material classes of transactions, account balances and disclosures that may be significant.

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Amendments to ASA 315

28.               Existing paragraph A45 is amended to read as follows:

When an engagement is carried out by a large engagement team, such as for an audit of a group financial report, it is not always necessary or practical for the discussion to include all members in a single discussion (for example, in a multi-location audit), nor is it necessary for all the members of the engagement team to be informed of all the decisions reached in the discussion.  The engagement partner may discuss matters with key members of the engagement team including, if considered appropriate, those with specific skills or knowledge, and those responsible for the work to be performed ataudits of components, while