Reference in a group auditors' report to the fact that part of the audit of group financial statements was performed by component auditors most likely would be an indication of
A) Division of responsibility between the auditors who conducted the audits of the components of the group financial statements.
B) The portion of the group statements audited by the component auditors not being considered material.
C) Group auditors' recognition of the component auditors' competence, reputation, and professional certification.
D) Different opinions the auditors are expressing on the components of the financial statements that each audited.

Question

Quizplus · Accepted Answer

Reference to component auditors in the group auditors' report indicates that there was a division of responsibility between the auditors who conducted the audits of the components of the group financial statements. This is typically done when the group auditors have relied on the work of component auditors to audit portions of the group financial statements. The reference to component auditors does not necessarily imply anything about materiality, recognition of competence, reputation, or professional certification, or different opinions on the financial statements.

Reference in a Group Auditors' Report to the Fact That