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Hi Kim
Hope you are well and safe.
I just have a confusion regarding group audits.
From a technical article I read that “group auditor determines the components materiality”
Does that mean that group auditor decides whether the components say for eg a subsidiary FS is material to consolidated group FS ?If yes , which one item from subsidiary FS is considered
Hi Izabel – I have expanded on this in the latest edition of the notes – the example on page 99 illustrates why the group auditor must determine component materiality and page 100 elaborates on its relevance to significant components.
Just to be clear – the word “component” refers to the entities that are subsidiaries. For each component the group auditor would consider whether its revenue and/or profit and/or total assets is material to the consolidated financial statements. See reference to 15% on page 101.
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