Document ID: chunk:federal_register_of_legislation:F2025C00096:body:0:p13
Version: federal_register_of_legislation:F2025C00096
Segment Type: other
Provision Reference: 
Character Range: 37280–40643

material misstatement due to fraud arising from the consolidation process.

 2.                If the financial information of an entity or business unit has not been prepared in accordance with the same accounting policies applied to the group financial report, the group auditor shall evaluate whether the financial information has been appropriately adjusted for purposes of preparing and presenting the group financial report.

 3.                If the group financial report includes the financial information of an entity or business unit with a financial reporting period-end that differs from that of the group, the group auditor shall take responsibility for evaluating whether appropriate adjustments have been made to that financial information in accordance with the applicable financial reporting framework.

Considerations When Component Auditors Are Involved

 1.                When the group auditor involves component auditors in the design or performance of further audit procedures, the group auditor shall communicate with the component auditor about matters that the group auditor or component auditor determine to be relevant to the design of responses to the assessed risks of material misstatement of the group financial report.

 2.                For areas of higher assessed risks of material misstatement of the group financial report, or significant risks identified in accordance with ASA 315, on which a component auditor is determining the further audit procedures to be performed, the group auditor shall evaluate the appropriateness of the design and performance of those further audit procedures.  (Ref: Para. A142)

 3.                When component auditors perform further audit procedures on the consolidation process, including on sub-consolidations, the group auditor shall determine the nature and extent of direction and supervision of component auditors and the review of their work.  (Ref: Para. A143)

 4.                The group auditor shall determine whether the financial information identified in the component auditor's communication (see paragraph 45(a)) is the financial information that is incorporated in the group financial report.

Evaluating the Component Auditor's Communications and the Adequacy of Their Work

 1.                The group auditor shall request the component auditor to communicate matters relevant to the group auditor's conclusion with regard to the group audit.  Such communication shall include: (Ref: Para. A144)

         1.                 Identification of the financial information on which the component auditor has been requested to perform audit procedures;

         2.                 Whether the component auditor has performed the work requested by the group auditor;

         3.                 Whether the component auditor has complied with the relevant ethical requirements, including those related to independence, that apply to the group audit engagement;

         4.                 Information about instances of non-compliance with laws or regulations;

         5.                 Corrected and uncorrected misstatements of the component financial information identified by the component auditor and that are above the threshold communicated by the group auditor in accordance with paragraph 36; (Ref: Para. A145)

         6.                  Indicators