Lavanya asked 3 years ago
CFS 1. If Advik Ltd. Is a listed entity.. Then audit / limited review of components is required?? If yes how limited review of component will be different from audit procedures performed under SA 600 when using work of the component auditor??
CFS. 4 In this MCQ Joint venture FS are not audited. How can auditor use unaudited FS of components for audit of CFS? Why auditor should accept management certified accounts?
Ravi Staff answered 3 years ago
For CFS.1
Co Act doesnt require parent company auditor to review work of subsidiary company auditor.
SA 600 prescribes responsibility of parent company auditor, which depending on qualification of subsidiary auditor and circumstances, can range from discussion, summary, questionnaire, visit only for documents with respect to consolidation
SEBI LODR says parent company auditor has to review audit done by subsidiary, this review is done as per SEBI guidelines it has nothing to do with SA 600 & Co Act
This MCQ is based on Co Act requirement no need to apply SA 600 or SEBI Guidelines
Ravi Staff answered 3 years ago
For CFS.2
Financial Statements of components may remain unaudited sometimes. In this case of JV is consolidated which is unaudited.
If its immaterial its absolutely fine, parent company may give other matter paragraph to highlight this.
If its material then parent company will have to qualify or give disclaimer as the case may be.