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Consolidated Accounts

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Consolidated Accounts

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 1, 2016 at 6:54 pm #347011
    Muslim Farooque
    Member
    • Topics: 190
    • Replies: 134
    • ☆☆☆

    i was a little unclear about one things sir that, i know that they are individual accounts for subsidiaries and parents combined into consolidated set of accounts; now for example if the subsidiaries accountants are inexperienced in group scenario ; then can an their inexperience effect the group accounting adjustments? i would imagine that the parents accountants would be involved in doing the consolidation entirely;

    November 1, 2016 at 7:04 pm #347014
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    But the parent’s auditors need to be working with reliable information

    That’s why one of the matters to which those group auditors need to direct their attention is the quality of the component auditors

    In practice it should not ordinarily be an issue and it will always be a dangerous statement to make in an exam answer where you may feel tempted to disparage an accounting qualification other than ACCA

    For example, the capabilities of a qualified member of the Institute of Chartered Accountants in England and Wales should not be called into question – just because they are not ACCA qualified does not necessarily make them any less capable than ACCA

    November 2, 2016 at 1:06 pm #347082
    Muslim Farooque
    Member
    • Topics: 190
    • Replies: 134
    • ☆☆☆

    no but if the subsidiary has no experience of being in a group but produces their individual statements correctly, how can it be a risk to the groups accounts ?

    November 2, 2016 at 4:47 pm #347116
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    It’s potentially (theoretically) the case that consolidation adjustments (like pups) are overlooked by the inexperienced component auditors

    But, as I said before, that’s most unlikely in practice

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