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CA Final · Advanced Auditing, Assurance and Professional Ethics · Group Audits

CA Meera audits the parent, Kaveri Foods Ltd, and its own work covers only a small fraction of the total financial information. Other auditors audit components that account for almost all of it. Which conclusion is consistent with SA 600?

She should consider whether her own participation is sufficient to act as principal auditor, because the portion of financial information she audits is small. Under SA 600, materiality of that portion is a key factor, and being the parent's auditor does not by itself settle the matter.

  1. AShe may act as principal auditor, since being appointed auditor of the parent is enough
  2. BShe should reflect on whether her participation is sufficient to act as principal auditor, because the materiality of the portion she audits is lowCorrect
  3. CShe may ignore materiality, because only the risk of misstatement matters for acceptance
  4. DShe must act as principal auditor, because the other auditors' reports are available to her

Explanation

SA 600 requires the auditor to consider whether his own participation is sufficient, and the first matter is the materiality of the portion he audits. Here that portion is small, so sufficiency is doubtful. Appointment as parent's auditor does not by itself settle the question.

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