Specific matters when auditing groups

In this lesson

1. 0:00 Group audits: investments and classification
2. 0:59 Subsidiaries versus associates: key distinctions
3. 2:23 Verifying ownership, control and influence
4. 3:05 Goodwill calculation and impairment testing
5. 7:32 Consolidation process: extraction and adjustments
6. 10:16 Foreign subsidiaries: translation and policy alignment
7. 12:18 Modified audit reports and materiality assessment
8. 14:05 Clothing group case study: unrecognised liability

About this lesson

This session builds on group audit fundamentals to focus on the technical challenges you'll face in practice: classifying investments correctly as subsidiaries or associates, calculating goodwill and non-controlling interests, and verifying the consolidation process itself. You'll explore how control and significant influence determine accounting treatment under IFRS, and how to audit the key figures in a group acquisition—from the consideration paid through to fair value adjustments and impairment testing. The lesson walks you through consolidation procedures step by step, including how to extract figures accurately from component financial statements, handle time apportionment for acquisitions or disposals, and manage currency translation for foreign subsidiaries. A critical part of group audits is dealing with modified audit reports from component auditors. You'll learn how to assess whether issues identified at component level are material to the group, and how materiality differences can mean you resolve matters through consolidation adjustments rather than modifying your group opinion. The lesson uses a worked example involving a contingent liability to show how to evaluate evidence, involve experts when needed, and decide whether to request adjustments, make consolidation entries, or qualify your opinion. By the end, you'll understand the practical steps to verify group financial statements, manage the relationship between component and group materiality, and form a defensible audit opinion on consolidated accounts.

Duration: 19m