Area II: Risk Assessment — CPA Practice Question 26

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Group Audits: Two paths. 1. Assume Responsibility = No Reference (Standard Report). 2. Divide Responsibility = Reference in Opinion (Modified Wording).

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A.The group auditor issues a standard unmodified opinion and makes no reference to the component auditor.✓ Correct

Under AU-C 600, if the group engagement partner decides to assume responsibility for the work of a component auditor, no reference to the component auditor should be made in the auditor's report. The group auditor treats the work as if they performed it themselves.

Common mistakes

Confusing 'Assuming Responsibility' with 'Division of Responsibility'.

An auditor is reviewing the work of a component auditor who audited a significant subsidiary of a nonissuer group financial statement audit. The group auditor decides to assume responsibility for the work of the component auditor. Which of the following reporting options is appropriate?

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Practice the full CPA AUD Practice Exam 2

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