If more than one component auditor was used to audit multiple subsidiaries, _______.
A)then the audit report should not be relied upon
B)then the portion of the client audited by all component auditors can be aggregated together and expressed as one-dollar amount or percentage
C)then the portion of the client audited by all prior auditors can be aggregated together and expressed as one-dollar amount or percentage
D)control risk will increase accordingly

Question

Quizplus · Accepted Answer

When multiple component auditors are used to audit multiple subsidiaries, the portion of the client audited by all component auditors can be aggregated together and expressed as one-dollar amount or percentage. This allows for a consolidated financial statement to be created for the entire entity. The audit report can still be relied upon as long as the component auditors were properly coordinated and communicated with each other. Control risk may or may not increase accordingly depending on the findings of the audits.

If More Than One Component Auditor Was Used to Audit