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hi mike,what is the threshold for determine whether the party are significant component in group audit?
Thanks
The concept of significant components is “defined” as:
a) a component that is of individual financial significance to the group, or
b) a component that, due to its specific nature or circumstances, is likely to include significant risk at the group financial statements level
It may be measured on a percentage basis – for example 10% of group profit
However, even though it may be below the threshold, it may still pose a significant financial risk
It’s not therefore possible to identify any specific benchmark – it comes down to a matter of professional judgement in each separate case
Ok?
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