A group auditor is accountable for providing the audit opinion on group financial statements. There’re special considerations that apply to group audits, in particular those that involve component auditors.
(a) In brief describe the following terms employed in the audit of a group.
(i) Component materiality
(ii) Significant component
(iii) Group engagement partner
(iv) Group financial statements
(b) A group auditor needs to obtain an understanding of component auditor if it plans to request the latter to perform work on the financial information of a component. Illustrate out four (4) matters that will aid the group auditor to understand the component auditor.
(c) Illustrate out the type of work a group auditor needs to perform on financial information of:
(i) Significant Components
(ii) Not Significant Components
(d) Group management might need to keep certain material sensitive information confidential. State all four exs of matters that may be significant to the financial statements of component of which component management might be unaware.