Planning

A robust understanding of the group, its environment and internal controls is fundamental to planning and performing an effective group audit. To obtain that information, the group auditor needs to include component auditors in performing relevant activities.
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Logistics

The logistics of groups audits can be challenging, particularly when budgets are tight. They often involve different countries, laws and regulations, cultures, time zones and languages. Group audits can be performed by a single office, multiple offices within the same firm or multiple firms in the same network. Read more

Execution

The group auditor’s risk-based determination of the nature, timing and extent of work to be performed at each component – based on their relative importance to the group financial statements – directly informs the audit approach. The higher the risk associated with a component, the more audit work will be needed. Read more

Documentation

Audit files should demonstrate that sufficient appropriate audit evidence has been obtained, explaining the evaluation processes and the judgements reached. They should document any significant restrictions and how those were addressed. Read more

Completion and reporting

Component auditors report on their work to the group auditor in the format agreed and documented in the group audit instructions. In practice, the reporting format is negotiable to an extent. Read more

Specific challenges

Areas that pose particular challenges are considered, including non-coterminous year-ends, aligning inconsistent accounting policies, letterbox companies and subsidiary audit exemption. Read more

Illustrative reports to the group auditor

Three templates are included for general informational and illustrative purposes. Read more