Guide to Using International Standards on Auditing in - IFAC

193
<strong>Guide</strong> <strong>to</strong> <strong>Using</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts
Communication
with the
Component
Audi<strong>to</strong>r
600.40-41
(continued)
Evaluating the
Sufficiency and
Appropriateness
of Audit Evidence
Obtained
600.42-45
Communication
with Group
Management and
Those Charged
with Governance
of the Group
600.46-49
Summarized Extracts from the Requirements Section
• Any identified significant deficiencies in internal control at the component level;
• Other significant matters that the component audi<strong>to</strong>r communicated or
expects <strong>to</strong> communicate <strong>to</strong> those charged with governance of the component,
including fraud or suspected fraud;
• Any other matters that may be relevant <strong>to</strong> the group audit, including exceptions
noted in the written representations that the component audi<strong>to</strong>r requested
from component management; and
• The component audi<strong>to</strong>r’s overall findings, conclusions, or opinion.
The group engagement team shall:
• Discuss significant matters arising from the evaluation of evidence with the
component audi<strong>to</strong>r, component management, or group management, as
appropriate; and
• Determine whether it is necessary <strong>to</strong> review other relevant parts of the
component audi<strong>to</strong>r’s audit documentation.
If the work of the component audi<strong>to</strong>r is insufficient, the group engagement team
shall determine what additional procedures are <strong>to</strong> be performed, and whether they
are <strong>to</strong> be performed by the component audi<strong>to</strong>r or by the group engagement team.
The group engagement team shall evaluate whether sufficient appropriate audit
evidence has been obtained from the audit procedures performed.
The group engagement partner shall evaluate the effect on the group audit opinion
of any uncorrected misstatements, and any instances where there has been an
inability <strong>to</strong> obtain sufficient appropriate audit evidence.
The group engagement team shall determine which identified deficiencies in internal
control <strong>to</strong> communicate <strong>to</strong> group management and those charged with governance.
If fraud has been identified, the group engagement team shall communicate this on a
timely basis <strong>to</strong> the appropriate level of group management.
The group engagement team shall communicate the following matters:
• An overview of the type of work <strong>to</strong> be performed on the financial information
of the components;
• An overview of the nature of the group engagement team’s planned
involvement in the work <strong>to</strong> be performed by the component audi<strong>to</strong>rs on the
financial information of significant components;
• Instances where the group engagement team’s evaluation of the work of a
component audi<strong>to</strong>r gave rise <strong>to</strong> a concern about the quality of that audi<strong>to</strong>r’s work;
• Any limitations on the group audit, for example, where the group engagement
team’s access <strong>to</strong> information may have been restricted; and
• Fraud or suspected fraud involving group management, component
management, employees who have significant roles in group-wide controls,
or others where the fraud resulted in a material misstatement of the group
financial statements.