When component auditors are involved in the audit of group financial statements, the group auditors are required to
A)consider the independence and professional reputation of the component auditors in deciding how to utilize their work.
B)identify the extent of component auditors' involvement if they choose not to rely on the component auditors' work.
C)identify the component auditors by name in their report to appropriate limit their liability for the component auditors' work.
D)disclaim an opinion on the portion of the financial statements examined by the component auditors.

Question

Quizplus · Accepted Answer

Group auditors are required to consider the independence and professional reputation of the component auditors in deciding how to utilize their work. This helps to ensure the reliability and quality of the audit process and the financial statements. Option B is only necessary if the group auditors choose not to rely on the component auditors' work. Option C is not required, as the group auditors are still responsible for the overall audit opinion. Option D is not appropriate, as group auditors should strive to provide a comprehensive opinion on the financial statements as a whole.

When Component Auditors Are Involved in the Audit of Group