Auditing the consolidation
Much of the time spent on a group audit is taken up dealing with the various components that make up the group. But the consolidation itself also needs to be audited. The complexity of this process varies enormously.
At one extreme there are groups where all of the components are dealt with by the group auditor and all of those components are subsidiaries which have been wholly owned since incorporation. In such cases, the audit of the consolidation is generally a fairly straightforward exercise. At the other end there are multinational groups, which have both acquired and sold components in the year, and which have possible impairment issues. Some of the procedures undertaken by auditors in the audit of the consolidation are common to both, but there are clearly many more issues likely to arise in the second situation.
Access Auditing groups: a practical guide (and supplementary material) which provides guidance on: