DefinitionsDefinitions

Definitions

1. For the purposes of this Auditing Standard, the following terms have the meanings attributed below:
   1. Aggregation risk – The probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial report as a whole. (Ref: Para. A19)
   2. Component – An entity, business unit, function or business activity, or some combination thereof, determined by the group auditor for purposes of planning and performing audit procedures in a group audit. (Ref: Para. A20)
   3. Component auditor – An auditor who performs audit work related to a component for purposes of the group audit. A component auditor is a part of the engagement team[10] for a group audit. (Ref: Para. A21–A23)
   4. Component management – Management responsible for a component. (Ref: Para. A24)
   5. Component performance materiality – An amount set by the group auditor to reduce aggregation risk to an appropriately low level for purposes of planning and performing audit procedures in relation to a component.
   6. Group – A reporting entity for which a group financial report is prepared.
   7. Group audit – The audit of a group financial report.
   8. Group auditor – The group engagement partner and members of the engagement team other than component auditors. The group auditor is responsible for:
      1. Establishing the overall group audit strategy and group audit plan;
      2. Directing and supervising component auditors and reviewing their work;
      3. Evaluating the conclusions drawn from the audit evidence obtained as the basis for forming an opinion on the group financial report.
   9. Group audit opinion – The audit opinion on the group financial report.
   10. Group engagement partner – The engagement partner [11] who is responsible for the group audit. (Ref: Para. A25)
   11. Group financial report – A financial report that includes the financial information of more than one entity or business unit through a consolidation process. For purposes of this ASA, a consolidation process includes: (Ref: Para. A26–A28)
       1. Consolidation, proportionate consolidation, or an equity method of accounting;
       2. The presentation in a combined financial report of the financial information of entities or business units that have no parent but are under common control or common management; or
       3. The aggregation of the financial information of entities or business units such as branches or divisions.
   12. Group management – Management responsible for the preparation of the group financial report.