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Hello KIm hope u are well.
Neegan Associates provides the audit service to Daryl Co, one of the Group’s foreign subsidiaries. Daryl Co is one of the Group’s larger subsidiaries, it is a listed company in its home jurisdiction, with total assets of $140 million.
significant component not audited by the group auditor is always a risk. is that correct.
As it says in this article: https://www.accaglobal.com/hk/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/group-audits.html
“A significant component is one which is of individual financial significance to the group or, due to its specific nature of circumstances, is likely to include significant risks of material misstatement of the group financial statements.” – this is regardless of who audits it.
As the article goes on …
“Where a significant component is audited by another party, it must be evaluated whether the group audit team will be able to be involved in the work of the component auditors to the extent necessary to obtain sufficient appropriate audit evidence.”
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