Evaluating the Component Auditor’s CommuEvaluating the Component Auditor’s Communications and the Adequacy of Their Work

Evaluating the Component Auditor’s Communications and the Adequacy of Their Work

1. The group auditor shall request the component auditor to communicate matters relevant to the group auditor’s conclusion with regard to the group audit. Such communication shall include: (Ref: Para. A144)
   1. Identification of the financial information on which the component auditor has been requested to perform audit procedures;
   2. Whether the component auditor has performed the work requested by the group auditor;
   3. Whether the component auditor has complied with the relevant ethical requirements, including those related to independence, that apply to the group audit engagement;
   4. Information about instances of non-compliance with laws or regulations;
   5. Corrected and uncorrected misstatements of the component financial information identified by the component auditor and that are above the threshold communicated by the group auditor in accordance with paragraph 36; (Ref: Para. A145)
   6. Indicators of possible management bias;
   7. Description of any deficiencies in the system of internal control identified in connection with the audit procedures performed;
   8. Fraud or suspected fraud involving component management, employees who have significant roles in the group’s system of internal control at the component or others where the fraud resulted in a material misstatement of the component financial information;
   9. Other significant matters that the component auditor communicated or expects to communicate to component management or those charged with governance of the component;
   10. Any other matters that may be relevant to the group audit, or that the component auditor determines are appropriate to draw to the attention of the group auditor, including exceptions noted in the written representations that the component auditor requested from component management; and
   11. The component auditor’s overall findings or conclusions. (Ref: Para. A146)
2. The group auditor shall:
   1. Discuss significant matters arising from communications with the component auditor, including those in accordance with paragraph 45, with the component auditor, component management or group management, as appropriate; and
   2. Evaluate whether communications with the component auditor are adequate for the group auditor’s purposes. If such communications are not adequate for the group auditor’s purposes, the group auditor shall consider the implications for the group audit. (Ref: Para. A147)
3. The group auditor shall determine whether, and the extent to which, it is necessary to review additional component auditor audit documentation. In making this determination, the group auditor shall consider: (Ref: Para. A148–A149)