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Vismay ShahVismay Shah asked 1 year ago

sir what is the difference between these 2 points: 1st point  Auditor is required to compute the materiality for the group as a whole. 2nd The parent auditor can also use the materiality computed on a group level to determine whether the component’s FS is material to the group

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RaviRavi Staff answered 1 year ago

1st statement says we need to compute separate materiality level for group that means consolidated financial statements, suppose it comes out to 5% of group profits i.e 5% of 200 crores which comes as 10 crores.
2nd statement now subsidiaries contributing in aggregate contributing less than 10 crores in profit will be excluded from scope of audit, unless there is any other factor making it important, like assets etc

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