Significant component to group

This topic has 3 replies, 2 voices, and was last updated 11 years ago by MikeLittle.

Viewing 4 posts - 1 through 4 (of 4 total)

Author
Posts
October 24, 2014 at 4:04 am #205707
samko
Member
- Topics: 18
- Replies: 23
Hi Sir,
What is threshold to be consider as significant component in group audit?
Revenue: ? %
Profit: ?%
Total asset: ?%
Thank you sir
October 24, 2014 at 9:09 am #205796
MikeLittle
Keymaster
- Topics: 27
- Replies: 23368
I don’t believe that there is a hard-and-fast rule. It really depends upon the subjective assessment of the audit partner but, if there’s too much subjectivity involved, that partner will most likely discuss the matter with the firm’s other partners
OK?
October 24, 2014 at 9:24 am #205798
samko
Member
- Topics: 18
- Replies: 23
Thank you sir.
if we did calculated that the acquired entity is 5% to group, is this consider as significant component?
As I wonder does it exist threshold like materiality level?
Thanks
October 24, 2014 at 10:18 am #205802
MikeLittle
Keymaster
- Topics: 27
- Replies: 23368
No, not that I’m aware. I suppose the 5% could be viewed as material but equally it need not be. For example, if the other 95% were derived from a single source, then 5% could be viewed as not material
Subjectivity – that’s the key!
Author
Posts

Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.