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Hi Miss, I have a question related to PYQ Mar 2020 Q1 (b)(i)
Since there is a deficiency of the audit planning of Darly Co by Neegan Associate, why we not involved with obtaining the appropriate and sufficient audit evidence by ourselves which perform the audit procedure by ourselves rather than perform by the component auditor on behalf of group auditor that relevant to the group FS? as the examiner answer suggests the group auditor considering the level of testing required to be tested by the component auditor.
Thank you.
The audit hasn’t been performed yet – the group auditor communicates with the component auditors to ensure that the work of the component auditors will be sufficient.
Consider this:
The component audit is paid by the subsidiary for the audit of the subsidiary.
The group audit is paid by the parent for the audit of the parent’s separate financial statements and consolidated financial statements.So the group auditor isn’t just going to “take on” auditing the subsidiary.
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