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Please tell me whether the below procedure are correct for qs Nassau group 6/11 b) part
Review the reasonableness of any due diligence report prepared for any acquisition or disposal of subsidiary to confirm that the fair values of assets and liabilities are appropriate.
On the face of it, this seems to be a reasonable procedure
However, there is nothing in the question to suggest that any of those 6 subsidiaries is a recent acquisition and surely a check on due diligence reports to confirm fair values would only apply in the case of a newly acquired subsidiary
I suppose that, if you’re struggling to get to 8 points in part b) you could add as a make-weight something like:
“In the event that there is a newly acquired subsidiary since our previous audit, we should review ….”
But this is only if you can’t think of anything else to get you to 8 points
As it is, the question asks you for “principal audit procedures in the consolidation process” and I’m not at all convinced that a review of due diligence reporting would be done as a principal audit procedure
But, as I say, as a make-weight ok, bring it in
OK?
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