Chapter 8 GROUP AUDITS

LEARNING OBJECTIVES

After completing this chapter, you should be able to do the following:

  • Determine when to apply the group audit standard.
  • Differentiate among a component, component unit, and an opinion unit.
  • Identify the responsibilities of the group auditor when taking responsibility for the component auditor or making reference to the component auditor.

GROUP AUDITS

Group audits include the financial information of more than one component. AU-C section 600, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) (AICPA, Professional Standards) addresses special considerations that apply to group audits. An audit of group financial statements involves identifying the components that are part of the group and considering the effect of the components on the overall group audit strategy and group audit plan, including the extent to which the group engagement team will use the work of component auditors.

The applicability of AU-C section 600 depends on whether more than one component is identified, regardless of whether there is another auditor involved. On the other hand, if only one auditor is responsible for all of the opinion units in the financial reporting entity and no components are included, the requirements of AU-C section 600 may not apply.

AU-C section 600 always applies if the government has an equity method investment or when a component is audited by other auditors.

The purpose of this ...

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