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Hi
My question is suppose we have one parent and its two subsidiaries. Now what will be the job of the component auditors here; is it to audit each subsidiary individually Or? And if thats the case then why do we need to carry group audit if we report that each subsidiary is well audited hence by using the same figures we do a new consolidation? Im really confusedEach separate entity requires an audit (so long as it’s not a private company in the UK) so that’s why the component auditors have to carry out an audit and issue an audit report with an audit opinion
You ask “why do we need to carry group audit”?
Because the group auditor is required to express an opinion on the truth and fairness of the group financial statements and a potentially integral part of those statements are the figures from the subsidiaries
Would you trust anyone 100%?
That’s why the group auditors must do sufficient work themselves to be able reasonably to rely upon the work of others
OK?
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