A group auditor is responsible for providing the audit opinion on the group financial statements. It must ensure that the group audit is carefully planned and that communications with component auditors are made early in the audit process. The group auditor needs to gather two types of evidence. Evidence regarding individual components of the group may be gathered and evidence on the consolidation process must be thorough, and planned with regard to numerous complex financial reporting standards.
problem1. The group auditor must plan the audit procedures to be performed on the consolidation process. describe the types of audit procedures that could be performed on the consolidation process.
problem2. For all companies within the group, regardless of materiality, the group auditor should review a report of work done by the component auditor.
i. Briefly describe the meaning of a component and a component auditor.
ii. Following this review, what further action the group auditor needs to take, to ensure that the financial statements are free from material misstatement.
problem3. State four conditions or events that may indicate risks of material misstatement of the group financial statements.