Communication with Group Management and Communication with Group Management and Those Charged with Governance of the Group

Communication with Group Management and Those Charged with Governance of the Group

Communication with Group Management

1. The group auditor shall communicate with group management an overview of the planned scope and timing of the audit, including an overview of the work to be performed at components of the group. (Ref: Para. A159)
2. If fraud has been identified by the group auditor or brought to its attention by a component auditor (see paragraph 45(h)), or information indicates that a fraud may exist, the group auditor shall communicate this on a timely basis to the appropriate level of group management in order to inform those with primary responsibility for the prevention and detection of fraud of matters relevant to their responsibilities. (Ref: Para. A160)
3. A component auditor may be required by statute, regulation or other reasons to express an audit opinion on the financial report of an entity or business unit that forms part of the group. In that case, the group auditor shall request group management to inform management of the entity or business unit of any matter of which the group auditor becomes aware that may be significant to the financial report of the entity or business unit, but of which management of the entity or business unit may be unaware. If group management refuses to communicate the matter to management of the entity or business unit, the group auditor shall discuss the matter with those charged with governance of the group. If the matter remains unresolved, the group auditor, subject to legal and professional confidentiality considerations, shall consider whether to advise the component auditor not to issue the auditor’s report on the financial report of the entity or business unit until the matter is resolved. (Ref: Para. A161–A162)

Communication with Those Charged with Governance of the Group

1. The group auditor shall communicate the following matters with those charged with governance of the group, in addition to those required by ASA 260[30] and other ASAs: (Ref: Para. A163)
   1. An overview of the work to be performed at the components of the group and the nature of the group auditor’s planned involvement in the work to be performed by component auditors. (Ref: Para. A164)
   2. Instances when the group auditor’s review of the work of a component auditor gave rise to a concern about the quality of that component auditor’s work, and how the group auditor addressed the concern.
   3. Any limitations on the scope of the group audit, for example, significant matters related to restrictions on access to people or information.
   4. Fraud or suspected fraud involving group management, component management, employees who have significant roles in the group’s system of internal control or others when the fraud resulted in a material misstatement of the group financial report.