In short
A component auditor performs audit work on the financial information of a component, such as a subsidiary or division, for a group audit. The group engagement partner remains responsible for the group audit opinion.
Key takeaways
- The group auditor evaluates the component auditor's competence, capabilities and independence.
- Under American Institute of Certified Public Accountants standards, the group auditor may make reference to the component auditor's report, which divides responsibility.
- If reference isn't made, the group auditor must be involved in the component auditor's work.
Where it's tested
AUD: Group Audits & Using Others' Work — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A group auditor decides to make reference to a component auditor who audited a significant subsidiary. What is the effect on the auditor's report?