CA Final · Advanced Auditing, Assurance and Professional Ethics · Group Audits
Before accepting the role of principal auditor for Narmada Industries Ltd., which has two branches audited by a different firm, CA Rohan lists some considerations. Which one is among the matters SA 600 requires the auditor to consider?
The principal auditor must consider the materiality of the portion of the financial information that he audits himself. The other listed matters are his knowledge of the components' business, the risk of material misstatement in the other auditor's components, and additional procedures that give significant participation. Fees, firm size and distance are not listed.
- AThe audit fee charged by the other auditor
- BThe materiality of the portion of the financial information which the principal auditor auditsCorrect
- CThe number of partners in the other auditor's firm
- DThe geographical distance between the branches and the head office
Explanation
The text lists materiality of the portion audited by the principal auditor, the degree of knowledge of the business of the components, the risk of material misstatement in components audited by the other auditor, and additional procedures giving significant participation. Fees, firm size and distance are not listed.
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