Document ID: chunk:federal_register_of_legislation:F2025C00096:body:0:p57
Version: federal_register_of_legislation:F2025C00096
Segment Type: other
Provision Reference: 
Character Range: 163401–166400

be complex due to the number and nature of the entities and business units comprising the group.  In addition, as explained in paragraph A7, the group auditor may determine that certain entities or business units may be considered together as a component for purposes of planning and performing the group audit.  Therefore, discussing with group management an overview of the planned scope and timing may help in co-ordinating the work performed at components, including when component auditors are involved, and in identifying component management (see paragraph A24).

 2.       ASA 240[91] contains requirements and guidance on the communication of fraud to management and, when management may be involved in the fraud, to those charged with governance.

 3.       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.

 1.       Group management may inform the group auditor about non-compliance or suspected non-compliance with laws or regulations in entities or business units within the group.  Paragraph A87 provides guidance for the group engagement partner in these circumstances.

Communication with Those Charged with Governance of the Group (Ref: Para. 57)

 1.       The matters the group auditor communicates to those charged with governance of the group may include those brought to the attention of the group auditor by component auditors that the group auditor judges to be significant to the responsibilities of those charged with governance of the group.  Communication with those charged with governance of the group may take place at various times during the group audit.  For example, the matter referred to in paragraph 57(a) may be communicated after the group auditor has determined the work to be performed on the financial information of the components.  On the other hand, the matter referred to in paragraph 57(b) may be communicated at the end of the audit, and the matters referred to in paragraph 57(c)–(d) may be communicated when they occur.

 2.       ASA 260[92] requires the auditor to communicate with those charged with governance an overview of the planned scope and timing of the audit.  For a group audit, this communication helps those charged with governance understand the group auditor's determination of the components at which audit work will be performed, including whether certain of the group's entities or business units will be considered together as a component, and the planned involvement of component auditors.  This communication also helps to enable a mutual understanding of and discussion about the group and its environment (see paragraph 30) and areas, if any, in which