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Dear Mike,
Can I kindly ask you for further explanation of difference between joint audits and component auditors (eg in subsidiary audit) ?
Thank you in advance,
PetarA joint audit is an audit of a single entity that is shared between 2 firms of auditors
A component auditor is the auditor of a subsidiary entity within a group and is not the auditor of the parent entity
OK?
Dear Mike,
Thank you kindly for prompt reply.
You are not so lucky, I still did not get it :), the text from OT P7 notes states the reasons for JA “an entity operating from many distant locations may find it useful to have joint auditors.” and “overseas subsidiaries may need to employ local audit firms to satisfy the laws of the country in which they operate.”
eg Group XYZ UK have many subsidiaries in distant locations, one of them is XYZ Country A and their group auditor is one of Big4 UK.
what would be a component audit and what would be a joint audit ?
Thank you again,
PetarA joint audit would be where Ernst Young shared the group audit with KPMG
A component auditor would be, for example, used in a country where XYZ has a subsidiary but neither EY nor KPMG has an office and it’s too immaterial in the context of the group to send anyone out to, say, Nauru
However, there is an office of Deloittes in Nauru so the audit of the Nauru subsidiary is carried out by Deloittes – the component auditor
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