Auditing the consolidation process is not required if the equity method is used.

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Quizplus · Accepted Answer

Auditing the consolidation process is still necessary even if the equity method is used. While the equity method doesn't require a full consolidation of financial statements, it still involves significant judgment and estimation in determining the appropriate accounting for the investment. As a result, auditors need to assess the accuracy and completeness of these methods, including reviewing the underlying assumptions and calculations behind the equity method.

Auditing the Consolidation Process Is Not Required If the Equity