Principles Of Auditing & Other Assurance Services
Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 17, Problem 22QRA

a.

To determine

Explain if the auditor should make reference to the component auditors in its audit report.

b.

To determine

Explain if the group auditors need to include the qualified report as issued by the component auditor in their audit report.

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The client has a subsidiary in the USA and another in Canada, which this year together accounted for 8% of the group’s revenue, profits and net assets. Neither subsidiary is audited although both use external professional accountant to prepare the financial statements. We were unable to obtain any financial statements or accounting records of the two subsidiaries for our audit. The client’s management was unwilling to ask local accountants to perform a full audit. Q) Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.
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