OT Flashcards

Question

BoD

Answer 1

at least half NED who are independent (no signif shareholding, no close family ties with executive directors) NEDs must give constructive challenge and strategic guidance and hold mngt to account chairman can't be for more than 9 years annual performance review annually and rigorous of its committees and director annual re-election

Answer 2

Must examine the experts work in respect to 1. Consistency with other audit evidence 2. Significant assumptions made - rate of inflation or rate of returns 3. Use and accuracy of source data. Up to date list of property the company owns 4. When the work was carried out to assess whether it is up to date

Answer 3

Assess DI of internal controls Investigate special cases - fraud Assess security and operation of IT system Use their work only when limited judgement is needed!!!!

Answer 4

1. Assess org status of IA department. Whom they report? Are they objective? Size? - OBJECTIVE? 2. Assess competence of IA department: members of professional body? Do they have regular trainings? Do they have time and resources to carry out their work adequately - COMPETENT 3. Assess of the IA carry out the work systematically and in disciplined way. Are there quality control? Is there standard documentation? Is the work planned and reviewed? - SYSTEMATIC APPROACH

Answer 5

Even if independent, cannot involve in matters - involving significant judgement - relating to higher assessed risks - relate to internal auditors own work

Answer 6

not after the reporting date!! evidence about the completeness assertion required represen 1. any knowledge or suspicion of fraud has been disclosed to auditor 2. all known or actual possible litigations has been disclosed Belief that significant assumptions made in estimates are reasonable 3. all known RPs, relationships and transactions have been disclosed and accounted 4. all events subsequent to reporting date are adjusted 5. plans for future actions relating to management's going concern assessment

Answer 7

to draw attention to the possibility that its SFP and PL may have been affected by existence of RPs - close ppl of those who are key managmnt team, has control, joint control or significant influence - entity is RP if it is a parent, subsidiary, fellow subsidiary, associate or joint venture of the reporting entity risk of RP transactions: entered to defraud other parties or to evade tax if not identified, there is risk - fraud - unfair presentation - non-compliance with law

Answer 8

- enquire management about RO transactions - board minutes review - review for unusual transactions - bank certificates - we could give guarantees to others - review shareholders with whom company trades - review investment activities - purchase of shares that might indicate purchase of significant shares - enquire into the names of pension trustees - get the rep letter

Answer 9

1. amount 2. balance and terms (state that arm's length only if auditor can substantiate it) 3. allowance for doubtful accounts - expense recognized in the period in respect of irrecoverable or doubtful debts due from RP

Answer 10

FAMILIARITY THREAT, esp if it is listed company audit asssitant doing HR area is not correct is hte partner says its ok bc he is too close to client - 9 years or does not have enough time to review

Answer 11

compare per customer revenue change across the years!!! total rev is increasing, but per customer is falling! contradict! trends to be investigated to ensure correct revenue recognition - point in time. PO is satisfied by transferring promised good or service to customer

Answer 12

amortisation for a class of assets as a whole is not always accurate. undervalue intanglis and over/under state profits. The auditor should also consider whether this issue has arisen in previous years’ audits.

Answer 13

1. non disclosure would affect the ability of users to make proper evaluations and decisions 2. required disclosure incl the nature of the event and an estimate of its fin effect or statement that reasonable estimate cannot be made IFRS 3 requires disclosure of information about a business combination whose acquisition date is after the end of the reporting period but before the financial statements are authorised for issue. therefore there is an audit risk that the disclosure is not complete or accurate

Answer 14

qualified - material - except for statement Adverse - material and pervasive - accounts are not true and fair! they are materially misstated EOM = correctly disclosed, but so big as to draw attention to it after opinion - place Basis of qualified or adverse opinion paragraph - explaining why the opinion has been modified

Answer 15

the auditor will issue a qualified opinion with 'except for' qualification. A BASIS FOR QUALIFIED OPINION WILL FOLLOW THE QUALIFIED OPINION WHICH WILL PRESENT THE MATTERS AND WILLL QUANTIFY THE FINANCIAL EFFECT OF THE MISSTATEMENT Don's say 'the matter will be discussed with management' - SAY WHAT SPECIFIC will be discussed - e.g impact on audit opinion if they don't make the adjustment NO SCORES for 'IFs' - its speculation keep the PHASE of audit in mind! whenever you say material - write % of revenue of PBT

Answer 16

FV-cost to sell = FV = comparing similar asset if there is one traded ViU = discounted future value of cash flows from continuous use of the asset state why you are getting tothat conclusion have a section: " actoins of the auditor"

Answer 17

demonstrates lack of competence and due care!!! even if he found review notes, there would be insufficient time to gather evidence - for example revenue - not having enouph time would have contributed to not making significant review points

Answer 18

no further audit review was performed despite the audit partner was on position for 9 years with a potential familiarity threat, who may be assuming that no issues to be founds evidenced by visiting on final day - indicating lack of safeguards - since it is high risk audit there should have been ind part

Answer 19

1. management is committed to sell 2. the asset is available for immediate sale 3. active program to locate a buyer is initiated 4. the sale is highly probable, within 12 months of classification as held for sale 5. the asset is being actively marketed for sale at a sales price reasonable in relation to FV 6. actions required to complete the plan indicate that it is unlikely to be changed or withdrawn *should be reclassed as held for sale and measured at Lower of Carrying amount and FV - cost to sell ** not depreciated *** immediately before classifying as held for sale - IMPAIRMENT is measured and recognised in accor with PPE and IAS 36 Risk #1 = assets not treated as disposal group and continued to be depreciated assets are overvalued if impairment review is not performed - since Burger's revenue is to fall it is an impairment indicator!!! Risk #2 = disclosure = assets and liabilities held for sale should be recognised separately from others! producst are separate line of business = discontinued operation POST TAX profit or loss of discontinued operation and post tax gain or loss on FV-cost to sell SHOUDL BE PRESENTED as a single amount on the face of OCI! In addition, detailed disclosure of revenue, expenses, pre‐tax profit or loss and related income taxes is required either in the notes or in the statement of comprehensive income in a section distinct from continuing operations.

Answer 20

1. shift costs to other group companies

Answer 21

joint arrangement whereby the parties who have joint control of the arrangement have rights to the net assets of the arrangement IFRS 11 requires that a joint venturer recognises its interest in a joint venture as an investment and shall account for that investment using the equity method

Answer 22

see what that increase is (here 45m), which is 14% of total revenue! an operating segment is component of the entity: - engages in business activities from which it may earn revenues and incur expenses! - whose operating results are reviewed regularly by chief decision makers! to make decisions about resource allocation and assess its performance - for which discrete fin information is available reported revenue is >10% of total Audit risk is that disclosure is not provided in relation to this reportanble segment or it is incompelte

Answer 23

IAS 20 - requires grants to be recognises systematically over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate amount relating to asset = SFP, it should be recognised in PL over the periods in which depreciation expense on the assets to which it relates are recognised! if funds are not used in the manner intended by the government, then some of the grants are repayable.

Answer 24

the individual FS, to ascertain the details of the amounts recognised - assist in planning compliance with measurement and disclosure req-s of ifrs - copy of due dilligence - ascertain key findings - understand mngts rationale for disposal, group board minutes - and how disposal fits in with Group restrcuturing -info re potential buyers - to develop expectation as to whether the disposal is likely to take place - any prelim determination of profit or loss and expectation of any impairment

Answer 25

- obtain legal docs /9the date, amount, number of shares purchased, voting rights, nature of profit sharing arrangement, nature of access to the assets of JV, CONFRIM that there is no restriction of control) - BoD mins and board rationale mins with the other JV - to understand nature and decision making process - org sturcutre - to confirm equal power

Answer 26

all docs to confirm term and requirements; the date by which it must be used, clauses on repayment - agree amounts received through bank statement - is amount planned to be spent on the grant purpose - forecast and budget - discuss the grant fund for marketing - is it to pormote the purpose - recycling features - Confirm, through agreement to marketing plans, whether any funds will be spent during this financial year. - rep letter that grant will be used for he specific purpose

Answer 27

1. self interest! - result - may 2. recommend wo proper consideration of their competence 3. significance of threat should be evaluates and safeguards applied: Disclosing to the group in writing the arrangement fee received obtain advance agreeemnt from the Group that arrangement is acceptable

Answer 28

providing IA service might create self-review threat to objectivity may overrely on the internal controls designed and evaluated by audit team not apply appr level of skepticism Threat of management responsibility, whereby the audit firm is making decisions and using judgement which is properly the responsibility of management spec-ly for PIE, IA shall not be provided in relation to signif part of controls over fin reporting,

Answer 29

isa 540 - simplest depreciation calc-n to the most complex of derivative fin instruments many measurements based on estimate, including FV measurements and impairment in relation to fin instruments - imprecise and subjective in nature! -> high Inherent risk RMM in estimated impacted by 3 factors: complexity, the application of mngt judgement and estimation uncertainty FV or impairment in relation to fin instruments = judgements: re market condition, the timing of cash flows and intentions of the entity => valuation involve complex models built on significant assumptions: predicted timing of CF, most appropriate DF and about probability weighted averages mngt maynot have sufficient experience and knowledge, may have deliberate attempt to manipulate the value of estimate in order to window dress the FS In overall assessment of audit risk - auditor assess the risk that internal systems and controls prevent and detect valuation errors manage detection risk at an acceptable level through effective planning and execution of audit procedures! However, the audit team may lack knowledge and experience in dealing with the estimation technique in question and therefore may be unlikely to detect errors in the valuation and modelling techniques applied by the client. Any resulting over‐reliance on an external specialist could also lead to errors not being identified.

Answer 30

cash settled share based payments - entity must measure the services acquired and the liability incurred at FV of the liability; - remeasure FV of liability each reporting period until the date of settlement - any changes recognised in PL

Answer 31

agreement that entitles the other party to receive cash/other assets based on the price/value of equity instruments - the amount of cash to be paid to supplier is determined with respect to share price - CASH settled other ways it to pay with share options - EQUITY SETTLED VESTING CONDITIONS - PERFORMANCE conditions that the other party should fulfill before being entitled to share-based payment when recognize as services are provided or goods are delivered HOW Cash settled: Dt assets or Expenses in PL Cr Liability Equity settled Dt assets or Expenses in PL Cr Equity Measurement at FV of goods/services received at the date! -> if not possible (employee service) => FV of equity instruments granted at the GRANT date VESTING conditions not vested = granted immediately = no period before entitlement - FULL Recognition at grant dat If vested = must complete a service period (employee gets 100 shares after 3 years of service) = recognised over vesting period! IFRS 2 prohibits subsequent adjustment to total equity after vesting date CASH settled share based payment transaction Measurement : Liability at FV by applying option pricing model FV must be remeasured at each reporting date until settled No vesting full recognised yes to vesting = recognised over vesting period

Answer 32

- scrutinize management performance - consider integrity of FS - determine director remuneration - participate in appointment and removal of directors audit firm must remain sceptical of the motivations of the family, particularly leading up to a listing. there will be incentive to overstate performance and inflate the value of the company; ET must be alert particualrly in matters involving mngt judgement

Answer 33

- monitor integrity of the FS - review internal financial controls - monitor independence of external auditor committee should have a member with relevant financial expertise and this will become of even more importance once the company is listed.

Answer 34

ET to communicate how the auditor maintained independence in Without an audit committee, matters of significance to the audit may not be given sufficient prominence by the board. listed = increased pressure and scrutiny to achieve performance levels This increases the level of audit risk and is likely to have a significant impact on the firm’s assessment of the risk of fraud and management override. listed = more detailed FS in a shorter time frame; the lack of financial expertise and lack of objective scrutiny by an audit committee may result in errors or omissions. once listed, the auditor’s report issued for Gull Co will be available to a much wider audience and will require additional disclosures in line with ISA 701 Communicating Key Audit Matters in the Independent Auditor’s Report

Answer 35

FV of price is based on options pricing model = complex valuation model

Answer 36

write actions!! 1. Obtain copy of contractual docs for share-based payment to CONFIRM - number of ppl; number of shares; gant and vesting date; conditions 2. Assess appropriateness of the model used to value the share appreciation rights by considering prof certification, experience, reputation and objectivity. 3. REVIEW the valuation by assessment of the assumptions used in order to determine the fair value of the share appreciation rights. 4. Obtain details of historic turnover rates! + ACTUAL DATA for the first year of VESTING PERIOD!!! 5. Discuss basis of staff retention assumptions and CHALLENGE their appropriateness 6. PERFORM SENSITIVITY analysis both the valuation model and the staffing forecasts.

Answer 37

where effect of time value of money is material, the amount of provision should be PV of expenditures - Discount rate should be pre-tax rate which reflects current market assessments of the time value of money and the risks specific to the liability. requires mngt to predict the payment dates and identify appr-te pre-tax rate. (which reflects current market assessments of the time value of money and the risks specific to the liability.) Professional scepticism should also be applied to the comment that the assumptions are the same as in previous years. New factors impacting on impairment may have arisen during this year, affecting the determination of the impairment loss and up‐to‐date evidence on the assumptions used in this year’s calculation should be sought

Answer 38

1. questioning mind 2. being alert to conditions which may indicate possible miss-t due to error or fraud and is critical assessment of audit evidence 3. can reduce the risk of fraud going undetected 4. be alert to existence of contradictory audit evidence 5. assess assumptions and judgements critically 6. reliability = not if prepped by mngt! 7. GC and RP - judgement in determining accounting treatment, potential for management bias is high 8. PS = maintaining objectivity whenever there is loos be sceptical - it could be higher than reported (corroborative evidence) 9. anytime said that X is same as last year - profe-l scepticism - new factors affecting impairment may have arisen this year

Answer 39

1. check assumptions against our understanding of business based on risk assessment procedures - reasonabless 2. check that it includes goodwill on all business combs 3. going concern -> growth rate and impairment 4. CONTROLs - TOE of review and approval by mngt or tcWG 5. reconcile data used via supporting docs - Disc rates, etc 6. develop independent estimate of impr loss and compare 7. Confirm that it excl CF due to tax or finance items 8. sensitivity analysis - how alternative assumptions are considered 9. ariphmetics

Answer 40

at inception, LL is measured at PV of lease payments not paid at inception date, discounted at the rate implicit in the lease ROUA = LL+ any lease payments made at or before the commencement date (less any lease incentives)+ estimate of restoration costs + direct costs. ROUA must deprec-ed over the term of lease. depreciation should be charged as the entity has the use of the asset, even if no lease payments have been yet been made. it represents a material misstatement unless management adjusts the amount.

Answer 41

1. contract to confirm $, period, any restoration costs = support for amounts to be incl in FS 2. Evidence on physical inspection = existence 3. Manegement's WP on calculatio on PV 4. copy of FA register to confirm amounts capitalised and breakdown of liabilities to confirm LL 5. copy of policy on acc treatment re depreciation is consis 6. discuss of mng on the use of the asset and cf arising from it - indicators of impar - proposed disclosures

Answer 42

an arrangement in which goods are left with a third party to sell. No control over the inventory as the supplier can require unsold inventory to be returned and Marlos Co has the right to return the inventory. In accordance with IFRS 15 Revenue from Contracts with Customers, the inventory remains the property of the supplier until Marlos Co has sold the inventory to a third party. This means that the inventory should only be recognised as a purchase and corresponding inventory amount = only inventory on which no longer has a right to return the assets, i.e. when they are sold to a customer As such, $8.1 million of inventory should not be recognised in the financial statements. This is receivable! due from the new supplier "payment is not required until Marlos Co has sold the inventory to a third party. It is not determined from the scenario that this inventory has been paid for, and some consignment inventory only falls due for payment once the goods have passed to the third party"

Answer 43

1. contract to understand and confirm terms and conditions of the sale or return arrangement and amounts involved 2. confirm total value of inventory which was unsold at year end 3. confirmation from supplier 4. post y/e amounts refunded to supplier and bank statement 5. calc of how much inventory held was eligible for return 6. Discussion with management about the misclassification of the inventory which can be returned and their reasoning for classifying this as inventory

Answer 44

lease - material, but not pervasive. THus qualified opinion shoudl be given on the basis of MM. This will be followed by 'basis of qualified opinion'

Answer 45

Order as per the CFS 1. if smth is sold, then CF from it will spot too!! 2. online poublishing is there, but what about the digital portfolio - key assumptions 3. recent event - no indication from the information provided by management as to how a full digital offering will be created by August 20X5, which is only one month away. assumption that 250K each 6m should be challenged for the following reasons: 1. It may also be overly optimistic to assume that Chandler Muriel will be able to deliver the books for publication in quick succession, in time to meet the publication deadlines set by Geller Co. 2. round 250K should be challenged 3. additional books in series- CFS not static 2% was not applied consistently - check accuracy!! last year is 5%! it could be a genuine mistake, or it could be a deliberate manipulation. Without a 5% increase in the final six‐month period, the cash position is negative, a motive for management bias in the calculations.

Answer 46

decision to sell is recent - given declining demand for printed - optimistic to assume the sale will actually go ahead! Amount should be challgened! Just because other ranges of books have successfully sold in the past, with a sale price based on a multiple of annual sales, it does not mean that the same model can be used for this particular range of books. Mngt has an incentive to incl an estimated sales receipt which covers loan repayment!

Answer 47

overly simplistic to take 1%=infl rate. attempt to understate operating expenses and improve the appearance of the cash flow forecast. Some exp mb missing, any specific operating expenses required to create the digital range of books and magazines, and marketing expenses related to promoting sales using online retailers. If sales are to increase by2% royalties should also increase by this rate - this doesn't appear to be factored in. No cash outflow on recently acquired digital publishing division, but signif costs mb incurred to merge it with existing business and preping the digital books and magazines to be launched nxt month

Answer 48

1. There does not appear to be any cash flows relating to tax payments included in the forecast. If management is claiming that there will be no tax payments during the period covered by the forecast, this assertion needs to be approached with professional scepticism 2. check - However, the omission of dividend payments could be a way formanagement to improve the cash flow forecast.

Answer 49

1. 2% growth - discussion with sales director and editors; given decline; plans on closer relations with online retailers 2. Corroborate!!! copies of any signed customer contracts (online or physical). general and specific in nature to the range of books to be published to justify forecasts 3. copy of contract with Muriel on dates of and amounts on advances and royalties due 4. Relating to the plans to launch a full range of digital books and magazines: readiness of platform - what has been done? confirm author agreement are obtained? digital platform is ready? sample of authors - agreements on consent 5. Notes of a discussion with management regarding the plans to sell the Happy Travels range, specifically to confirm: buyers expressed interest? stage of nego-ns? rationale for using multiple of annual sales model to estimate potential sales. 6. boD minutes - confirm approval of sales 7. assumptions on cash reeipts are consistent with ET knoweldge of business 8. Sensitivity - consistent with ET knowledge 9. Rep letter - reason-ss of assumptions and that all relevant info was provided 10. A review of the bank ledger account/cash book from 1 April 20X5 to the date of the auditor’s report, identifying any significant cash receipts which do not appear to have been included in the forecasts.

Answer 50

AA is correct that there is signi going concern due to uncertainty over sale of the Travels and repayment of loan. If sufficient evidence available to support the use of going concern basis of acc in FS = unmodified + Material Uncertainty related to going concern section to highlight issue But lack of evidence for assumptions used in CFF esp-ly on Happy Travels = modify opinion. Disclaim an opinion when unable to get sufficient, appr audit evidence on which to base the opinion +conclusion that possible effects on FS of undetected miss-ts, if any, could be material and pervasive! Here - both material and pervasive - impacts survival of the company

Answer 51

disclaim due to inability to obtain sufficient, appropriate AE - STATE that auditor does not express opinion on FS - instead of stating 'FS have been audited' state ' auditor was engaged to audit the FSs' - State that, because of the significance of the matter(s) described in the Basis for Disclaimer of Opinion section, the auditor has not been able to obtain sufficient, appropriate audit evidence to provide a basis for an audit opinion on the financial statements.

Answer 52

1. only after technical and commercial feasibility of the asset for sale or use have been established. 2. demonstrate an intention and ability to complete the development and that it will generate future economic benefits. 3. must demonstrate the existence of a market, which given the product design director’s comments appears uncertain. risk that research costs have been inappropriately classified as development costs and then capitalised, overstating assets and understating expenses. Evidence expected to be on file: 1. BoD minutes on discussion of Com feas 2. discussion with mngt - confirm that research costs are written off 3. confirm individual costs capitalised to date in production to ensure no research elements 4. review results of tests performed to demonstrate prototype is operational 5. budget vs actual costs - to determine if the product costs have deviated significantly from original budgets. 6. research on whether 2k is viable 7. Details of discussions with the product design director of any difficulties in the development of this product which have caused it to run over budget. 8. written rep letter - detail of intention to complete the project, including a commitment of resources and the ability to fund the future cash requirements to bring the product to market.

Answer 53

1. test estimates made 2. data on which these estimates are based 3. TOE of any controls 4. develop own expectation point or range to ev-te mngt's estimate 5. must fully understand the reasons for the reduction in the warranty provision. There could be valid reasons, for example, the sales mix between products could be different which failed to trigger a similar level of warranty provision, but the change in value should be fully investigated by the team.

Answer 54

increased risk of management bias in the estimation techniques. The audit team should approach this issue with professional scepticism and consider the motivation of the CEO in involving himself in accounting issues which had previously been left to the finance director.

Answer 55

1. copy of calc 2. notes discussion wiht mngt - reasons, source of assumptions 3. analysis of sales - product mix against PY - explain diffs and effects 4. Any quality control reports, disaggregated by product, reviewed for any indications that certain product lines have fewer warranty claims than in previous years. 5. Notes of the meeting with the customer services manager where the levels of customer complaints and product faults were discussed. 6. PY compare provision vs actual warranties 7. evaluate key assumptions vs mngt estimates - discuss sign variances 8. movement of provisions in acc period, ariph accuracy 9. approp-ss of JE

Answer 56

Assuming that the provision should have increased consistently with the increase in revenue of 11%, it would be expected that the year‐end warranty provision should be around $4.8 million. The actual provision recorded in Byres Co’s financial statements is only $2.1 million; therefore, the liability appears to be understated by $2.7 million. At 8.5% of total assets, the likely error in the provision is highly material to the statement of financial position Miss-t is immaterial, if management fails to amend the FSs, the opinion should be modified due to material, but not pervasive, miss-t. miss-t is confined to specific acc in FS and not subs proportion of FS. AR should incl a qualified opinion paragraph at the start of repr,

Answer 57

1. highlight a correctly given disclosure that is fundamental for users' understanding of FSs 2. IT CAnnot be used if there is a misstatement 3. EOMP cannot be used for immaterial items EOMP may be appropriate for the subsequent disposal of subsidiary needs to use judgement - can;t determine wehther the given information is of fundamental importance to users of f/s - need to see if material by amount or by nature (if the activities of the subsidiary were fundamental to the functioning of the rest of the group) EOMP - shoudl contain references to the item in te FS: AR would have references to disclosures in the FS re the issue to which it relates

Answer 58

Professional behavior; Objectivity Professional competence Confidentiality Integrity

Answer 59

Self review Advocacy Familiarity Intimidation Self interest

Answer 60

- relative size of the component in the group - rmm - significant changes espite its percentage contribution to the Group this year being less than the prior year, the reduction in the value of its assets of 27.1% is unusual and significant. Additionally, the operations of Yew Co are in the agricultural industry. This is a specialised industry and different from the main operations of the Group. Therefore, in accordance with ISA 600 Revised, it is likely that Yew Co should have been visited for audit work to be performed.

Answer 61

A lack of input and insight from the consultant could mean that audit risks specific to Yew Co have not been identified and that inappropriate and insufficient audit evidence has been obtained, with implications for both the individual financial statements of the company and the consolidated Group financial statements.

Answer 62

at min - form understanding of each component of the group and review their FS where component is material or significant contributor to inherent risk at the group level - further work on each component is required - TO BE SATISFIED THAT the FS of each COMPonent is UNLIKELY TO INTRODUCE ERRORS that could be material at group level his work might include: discussing with the component auditor, and/or the management of the component, the business activities that are significant to the group reviewing the more significant parts of the component auditor’s working papers discussing with the component auditor the susceptibility of the company’s financial statements to material error or deliberate misstatement reviewing the component auditor’s documentation of identified significant risks, and the conclusions reached on these risks observing final clearance meetings between the component auditor and the management of the company.

Answer 63

matterial misstatement disclosure or FS Qualified if not pervasive ANALYISS of pervasiveness of the issue - wrong to say that is it only 1 subs, therfore not pervasive - it touches almost all accounts on FS "Stronger answers were able to demonstrate that due to the nature of the issue, it was likely that the impact was pervasive as it would affect nearly every area of the financial statements, and therefore an adverse opinion would be appropriate.' rofessional skills marks where detailed analysis supported conclusions provided

Answer 64

- components at which to perform audit work is a matter of significant auditor judgement. - certain activities, such as the acquisition of a subsidiary or significant related party transactions, would form part of the Group auditor’s consideration in this regard. !!much of these considerations would be as a direct result of the assessment of the risk of material misstatement present within the component, driven by issues such as previous control issues or inconsistencies within analytical procedures.

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