An auditor is reviewing the work of a component auditor in a group audit. The group auditor decides NOT to make reference to the component auditor in the audit report. Which of the following is the group auditor's responsibility?

Answer options:

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

The group auditor assumes full responsibility for the work of the component auditor.

The group auditor shares responsibility with the component auditor.

The group auditor must name the component auditor in the notes to the financial statements.

How to approach this question

Group Audit: Make Reference = Shared Responsibility. No Reference = Full Responsibility (Group Auditor owns it all).

Full Answer

B.The group auditor assumes full responsibility for the work of the component auditor.✓ Correct

The group auditor assumes full responsibility for the work of the component auditor.

Under AU-C 600, if the group engagement partner decides not to reference the component auditor, they assume responsibility for the component auditor's work as if they performed it themselves.

Common mistakes

Confusing 'Make Reference' with 'Assume Responsibility'.

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