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1. A group has many subsidiaries and all of them prepare their financial statement using IFRS standards and the group audits so. However one of the subsidiaries prepares the finances under the local standard which is permitted by its national law and is very similar to the IFRS standard, hence the auditor didn’t perform additional work and consolidated.
There are no issues in the unmodified opinion being issued to the individual financial statement, but an unmodified has been issued in the case of the group too.
What ethical and professional issues will arise in this case?
2. Also, will any involvement in bribery can be linked back with the Money laundering offenses, as the law considers bribes as a criminal offense, whether the proceeds from it can be deemed as criminal proceeds or not ??
1. If the group has “many subsidiaries”, the “one” sounds immaterial to the consolidated financial statements. The group audit engagement partner should at least have considered whether any adjustments should be made on consolidation (that might have necessitated additional work) – this should have been documented in the group audit plan. So the principal ethical issue is professional competence and the professional issue is quality control.
2. No idea what you are asking. Bribery and money laundering offences are completely separate – e.g. in the UK there is the Bribery Act 2010 and the Proceeds of Crime Act 2002 (POCA) and Money Laundering Regulations, etc. If a bribe was paid with proceeds of crime then yes criminal offences will arise under both (if that is what you are asking).
Please can I ask that you write completely unrelated queries on separate posts.
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