Group Audit

Question 1

Planning - Before YE

Answer 1

• Understand** group structure** & what needs consolidating

Question 2

Materiality

Answer 2

Materiality of component- not all have to be audited.
>15% of Metric = significant. Increases w. acquisition.

Question 3

Goodwill

Answer 3

• PV of. consideration- if future consideration.
• If its contingenet show in FV.
• NCI calculated in right proportion. Check impairment.

Question 4

Consolidation

Answer 4

• Add accross 100% & NCI come out at bottom.
• Add it since acq date. Check same YE as sub.
• Check proper accounting for Step Acq.
• If further acquisition , reduce NCI in BS. difference to reserve.

Question 5

Disposal

Answer 5

• Partial - selling to NCI - Difference to reserve
• Full- remove sub NA,GW,NCI compare to proceed s & leftover & difference goes to Y statement.
• Leftover - accounting for.

Question 6

Intra Group Transactions

Answer 6

Purp and cash in transit cancelled out.

Question 7

Analytical procedures

Answer 7

If sub similar industry then margins should be similar

Question 8

Accounting Policies

Answer 8

Should be the same

Question 9

Timetable

Answer 9

Component auditors must be aware and compliant

Question 10

Foreign subs

Answer 10

Translation
B/S@closing rates- > Reserve
P/L @Ave rates-> Reserve

Question 11

Work of Group Auditor

Answer 11

1. Assess CA
2. Send audit instructions : materiality, ethical requirement, ROMM & Listof related parties so they can check for disclosures not made.
3. What we expect them to report back to us
4. Review work is sufficient or re-do it.
5. If significant i.e >15% or strategically important or risk is significant - newly acquired . Then revview files as reliance on work is greater and CSFP.

Question 12

What is CSFP

Answer 12

Evaluating work of CA
C- Componet Auditor Qual/Experience/Competence
S- Strategy
F - findings - in line with evidence
P- Procedure -sufficient and appropriate