Component auditors
In this lesson, you'll learn how to work with component auditors and fulfil your responsibilities as a group auditor. Component auditors may be separate audit firms or offices auditing subsidiaries or divisions of a larger group, and you need to establish robust communication and oversight procedures to ensure the
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In this lesson
- 0:00 Component auditors and group audit procedures
- 0:26 Minimum procedures for group auditors
- 1:26 Assessing component auditor independence and competence
- 2:56 Communication from group auditor to component auditor
- 3:56 Communication from component auditor to group auditor
- 5:08 Reviewing component auditor work and evidence
- 6:04 Aggregate effect of misstatements on group statements
About this lesson
group audit opinion is reliable. You'll discover the minimum procedures required when relying on component auditors' work. These include opening dialogue with the component auditor, understanding their business activities, assessing risks of material misstatement, reviewing their risk assessments and planned procedures, and evaluating their independence and competence. You'll also learn what information must flow both ways: the group auditor communicates materiality, ethical requirements, significant risks, and related parties to the component auditor, whilst the component auditor reports compliance matters, management bias, uncorrected misstatements, and internal control weaknesses back to the group team. Finally, you'll explore how to review and challenge the component auditor's work itself. This means examining their working papers, confirming sufficient and appropriate evidence exists, discussing significant matters, and considering the aggregate effect of any uncorrected misstatements on the group financial statements as a whole. This content is essential for the Audit and Assurance module and prepares you for group audit scenarios in your exams and professional practice.
Duration: 6m
Transcript
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