The auditor of a reporting entity for which consolidated accounts are required has:
A) the right of reliance on the work of the controlled entity's auditor.
B) the right of access to the accounting records of controlled entities.
C) the right to appoint the auditor of the controlled entity.
D) all of the above.

Question

Quizplus · Accepted Answer

The auditor of a reporting entity has the right of access to the accounting records of controlled entities to ensure that the consolidated accounts accurately reflect the financial position and performance of the entire group. This access is necessary for performing a thorough audit of the consolidated accounts. The auditor does not have the right to appoint the auditor of the controlled entity (this is typically the purview of the entity's management or shareholders) nor is there an inherent right to rely on the work of the controlled entity's auditor without performing their own due diligence and assessment of the work's adequacy for the purposes of the consolidated audit.

The Auditor of a Reporting Entity for Which Consolidated Accounts