Area II: Risk Assessment — CPA Practice Question 38

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

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

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

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.

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?

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Practice the full CPA AUD Practice Exam 3

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