Guide to the impact of the war in Ukraine on group auditors
This guide explores issues faced by UK group auditors with overseas component auditors in light of the Ukraine conflict.
Auditing groups of companies
Practical guidance, commentary and information on auditing groups of companies under ISA 600, including tools and support materials to help both group and component auditors.
Need to know
In this section
Planning your audit of groups
Scoping and materiality on group audits
Scoping is probably the single most critical element of a group audit. If group auditors get this wrong, there will be little they can do to salvage the audit because they will either be doing too much and inefficiently, or too little and non-compliant.
Communications and group audit instructions
An efficient and effective group audit requires channels of two-way communication between all the parties involved.
Logistics on group audits
While the requirements of ISAs present their own problems in group audits, the sheer scale and complexity of some group audits and their logistics are among the biggest headaches auditors face.
Materiality in the audit of financial statements
Applying the materiality requirements in International Standards on Auditing (ISAs) can be challenging. As highlighted in inspection findings, reviews and from experience in practice, it’s an area where improvement could be made.
Performing your audit of groups
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.
Review of component auditor work
If group auditors wish to use the work performed by component auditors, group auditors must be satisfied that component auditors are sufficiently competent and independent.
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.
Reporting on your audit of groups
Reporting by component auditors and other completion procedures
Component auditor reports to group auditors for group audit purposes prompt various matters for consideration.
Preparing an audit report for a group - combined audit report for the group and parent company
This guide is designed to explain the main changes that are needed to the audit report of a group compared to that of a company only.
Preparing an audit report for a group: separate audit reports for the group and parent company
This guide is designed to explain the main changes that are needed to the separate audit reports of a group and parent company compared to that of a company only.
Specific challenges when auditing groups of companies
Guide to the impact of the war in Ukraine on group auditors
This guide explores issues faced by UK group auditors with overseas component auditors in light of the Ukraine conflict.
Coronavirus (COVID-19): Considerations for group auditors
This Audit and Assurance Faculty Know-How guide explores COVID-19 issues faced by UK group auditors with overseas component auditors. It offers practical considerations in relation to the work of component auditors to address the requirements in ISAs (UK). It may also be relevant for group auditors in other jurisdictions with similar requirements.
Non-coterminous year ends, inconsistent accounting policies and subsidiary audit exemption
ISA 600 does not cover everything that creates problems for auditors. The following areas pose particular challenges for auditors and need to be dealt with carefully: non-coterminous year-ends; aligning inconsistent accounting policies; and subsidiary audit exemption and the audit of balances.