GROUP AUDITS
Accountancy Tuition Centre (International Holdings) Ltd 2009 0803
Consider matters such as integrity, objectivity,
independence (from group), confidentiality, conflicts of
interest, recruitment, training, professional
qualifications and CPD. If inappropriate, as above.
Review audit methodologies, technical manuals and
working papers used by other auditor. If inappropriate,
consider use of own systems/tailored programmes
(provided other auditor competent to use).
Plan approach to group as a whole. Consider for
example:
Changes within group structure – effective date,
audit arrangements, accounting policies adopted,
auditing standards used by auditors, non-
coterminous year ends.
Inter-company transactions (trading, non-current
assets, management charges, dividends, loans,
other), unrealised profits on such transactions,
inter-company balances.
Related party transactions between group
companies.
Inter-company guarantees and security, e.g. bank
loans guarantees, rights of set-off, pledged assets.
These will need to be disclosed.
Group accounting instructions.
Plan with/review audit plan (strategy and work
programme) of other auditors. The principal auditors
must be satisfied that all matters they require to be able
to reach a group opinion have been included (e.g.
specific risk areas, inter-company transactions, group
accounting policies).
Ensure other auditor’s report any potential problems as
soon as they arise so that the group audit plan can be re-
assessed as necessary (i.e. basically supervision).
Review the working papers of the other auditors to
ensure that the appropriate auditing standards have been
applied and their work can be relied upon in reaching a
group opinion. This will include the management letter
and contentious issues or matters for manager/partner
attention.
Review completed consolidation questionnaire
(equivalent to a typical manager/partner closedown
review checklist) covering matters requested at the
planning stage together with closedown documentation.