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.
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.
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.
An efficient and effective group audit requires channels of two-way communication between all the parties involved.
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.
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.
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.
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.
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.
Component auditor reports to group auditors for group audit purposes prompt various matters for consideration.
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.
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.
This guide explores issues faced by UK group auditors with overseas component auditors in light of the Ukraine conflict.
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.
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.