Letterbox companies are companies or groups of companies where the general and financial management and the company's operations are located in a different jurisdiction to that of the company's legal registration.
Audits of ‘letterbox’ companies are increasingly noted by audit regulators as situations in which much or all of the audit fieldwork is carried out by one auditor, and the audit report is signed by another, often in jurisdictions that only permit locally registered auditors to sign audit reports.
In some of these audits, audit work is performed by one firm (‘the fieldwork firm’) and signed by another (‘the signing firm’). This is not a group audit. There is no parent, whose opinion is being signed by a signing firm, and no component audited by a fieldwork firm. If the firm signing the opinion is required by law or regulation to take responsibility for the audit, it is responsible for making sure that an audit has been carried out and all relevant laws, regulations and ethical requirements have been complied with.