The International Auditing and Assurance Standards Board has re-issued an exposure draft titled "The Audit of Group Financial Statements."
The primary issues in the original draft revolved around the extent a group auditor needs to be involved in the audits of components being audited by other members of the audit team, and then whether that level of involvement should change based on whether those auditors are independent of the group auditor, or are related to the group auditor's firm.
The IAASB, which is an independent standard-setting board within the International Federation of Accountants, is seeking reaction on two specific changes in the new draft.
First, the board has proposed entirely eliminating the distinction between related and unrelated members of the audit team. Second, the proposed rule is drafted on the basis that a group auditor takes sole responsibility for the audit opinion on the group financial statements. The board wants to hear opinions on the level of detail a group auditor should require from team auditors in order to sign off on their work.
Respondents are also invited to comment on the clarity of the draft. Comments are due by July 31. The draft can be viewed at www.ifac.org/EDs.
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