An auditor is reviewing the work of a component auditor in a group audit of a nonissuer. The group engagement partner decides to assume responsibility for the work of the component auditor. Which of the following is TRUE regarding the auditor's report?

Answer options:

The group engagement partner should name the component auditor in the opinion paragraph.

The group engagement partner should indicate the magnitude of the portion audited by the component auditor.

The group engagement partner should NOT make reference to the component auditor in the audit report.

The group engagement partner must issue a disclaimer of opinion on the component.

How to approach this question

Group Audit Decision Tree: 1. Assume Responsibility? -> No Reference. 2. Divide Responsibility? -> Make Reference (mention % of assets/income).

Full Answer

C.The group engagement partner should NOT make reference to the component auditor in the audit report.✓ Correct

Under AU-C 600, if the group engagement partner assumes responsibility for the work of the component auditor, no reference is made to the component auditor in the auditor's report. The report looks like a standard audit report.

Common mistakes

Thinking you always mention the component auditor.

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