Shared service centres and group audits
Many companies now use shared service centres. Such centres provide information processing services and other services related to the finance function to multiple components in a group.
In effect, components outsource some elements of their financial reporting system to a shared service centre which is itself another component in the same group.
In establishing the group audit strategy and developing the group audit plan, group auditors are required to obtain an understanding of group-wide controls and the consolidation process. This inevitably involves understanding the way the group uses shared service centres, the nature and extent of services provided by them and how this affects the provision of financial information within the group reporting process. The location of service centres may also have a significant impact on group audit planning.