In applying ASA 220,^[13] the group engagement partner is required to take overall responsibility for managing and achieving quality on the group audit engagement. In doing so, the group engagement partner shall: (Ref: Para. A29–A30)

1. Take responsibility for creating an environment for the group audit engagement that emphasises the expected behaviour of engagement team members. (Ref: Para. A31)
2. Be sufficiently and appropriately involved throughout the group audit engagement, including in the work of component auditors, such that the group engagement partner has the basis for determining whether the significant judgements made, and the conclusions reached, are appropriate given the nature and circumstances of the group audit engagement.

Before accepting or continuing the group audit engagement, the group engagement partner shall determine whether sufficient appropriate audit evidence can reasonably be expected to be obtained to provide a basis for forming an opinion on the group financial report. (Ref: Para. A32–A35)

If, after the acceptance or continuance of the group audit engagement, the group engagement partner concludes that sufficient appropriate audit evidence cannot be obtained, the group engagement partner shall consider the possible effects on the group audit. (Ref: Para. A36)

Terms of the Engagement

In applying ASA 210,^[14] the group auditor shall obtain the agreement of group management that it acknowledges and understands its responsibility to provide the engagement team with: (Ref: Para. A37)

1. Access to all information of which group management is aware that is relevant to the preparation of the group financial report such as records, documentation and other matters;
2. Additional information that the engagement team may request from group management or component management for the purpose of the group audit; and
3. Unrestricted access to persons within the group from whom the engagement team determines it necessary to obtain audit evidence.

Restrictions on Access to Information or People Outside the Control of Group Management

If the group engagement partner concludes that group management cannot provide the engagement team with access to information or unrestricted access to persons within the group due to restrictions that are outside the control of group management, the group engagement partner shall consider the possible effects on the group audit. (Ref: Para. A38–A46)

Restrictions on Access to Information or People Imposed by Group Management

If the group engagement partner concludes that: (Ref: Para. A43–A46)

1. It will not be possible for the group auditor to obtain sufficient appropriate audit evidence due to restrictions imposed by group management; and
2. The possible effect of this limitation will result in a disclaimer of opinion on the group financial report,
3. the group engagement partner shall either:
   1. In the case of an initial engagement, not accept the engagement, or, in the case of a recurring engagement, withdraw from the engagement, when withdrawal is possible under applicable law or regulation; or
   2. When law or regulation prohibit an auditor from declining an engagement or when withdrawal from an engagement is not otherwise possible, having performed the audit of the group financial report to the extent possible, disclaim an opinion on the group financial report.

In applying ASA 300,^[15] the group auditor shall establish, and update as necessary, an overall group audit strategy and group audit plan. In doing so, the group auditor shall determine: (Ref: Para. A47–A50)

1. The components at which audit work will be performed; and (Ref: Para. A51)
2. The resources needed to perform the group audit engagement, including the nature, timing and extent to which component auditors are to be involved. (Ref: Para. A52–A56)

Considerations When Component Auditors Are Involved

In establishing the overall group audit strategy and group audit plan, the group engagement partner shall evaluate whether the group auditor will be able to be sufficiently and appropriately involved in the work of the component auditor. (Ref: Para. A57)

As part of the evaluation in paragraph 23, the group auditor shall request the component auditor to confirm that the component auditor will cooperate with the group auditor, including whether the component auditor will perform the work requested by the group auditor. (Ref: Para. A58)

Relevant Ethical Requirements, Including Those Related to Independence

In applying ASA 220,^[16] the group engagement partner shall take responsibility for: (Ref: Para. A59–A60, A87)

1. Component auditors having been made aware of relevant ethical requirements that are applicable given the nature and circumstances of the group audit engagement; and
2. Confirming whether the component auditors understand and will comply with the relevant ethical requirements, including those related to independence, that apply to the group audit engagement.

Engagement Resources

In applying ASA 220,^[17] the group engagement partner shall: (Ref: Para. A61–A68)

1. Determine that component auditors have the appropriate competence and capabilities, including sufficient time, to perform the assigned audit procedures at the component; and
2. If information about the results of the monitoring and remediation process or external inspections related to the component auditor has been provided by the group auditor’s firm or has otherwise been made available to the group engagement partner, determine the relevance of such information to the group auditor’s determination in paragraph 26(a).

The group auditor shall obtain sufficient appropriate audit evidence relating to the work to be performed at the component without involving the component auditor if:

1. The component auditor does not comply with the relevant ethical requirements, including those related to independence, that apply to the group audit engagement;^[18] or (Ref: Para. A69–A70)
2. The group engagement partner has serious concerns about the matters in paragraphs 23–26. (Ref: Para. A71)

Engagement Performance

In applying ASA 220,^[19] the group engagement partner shall take responsibility for the nature, timing and extent of direction and supervision of component auditors and the review of their work, taking into account: (Ref: Para. A72–A77)

1. Areas of higher assessed risks of material misstatement of the group financial report, or significant risks identified in accordance with ASA 315; and
2. Areas in the audit of the group financial report that involve significant judgement.

Communications with Component Auditors

The group auditor shall communicate with component auditors about their respective responsibilities and the group auditor's expectations, including an expectation that communications between the group auditor and component auditors take place at appropriate times throughout the group audit. (Ref: Para. A78–A87)

In applying ASA 315,^[20] the group auditor shall take responsibility for obtaining an understanding of the following: (Ref: Para. A88–A92)

1. The group and its environment, including: (Ref: Para. A93–A95)
   1. The group’s organisational structure and its business model, including:
      1. The locations in which the group has its operations or activities;
      2. The nature of the group’s operations or activities and the extent to which they are similar across the group; and
      3. The extent to which the group’s business model integrates the use of information technology (IT);
   2. Regulatory factors impacting the entities and business units in the group; and
   3. The measures used internally and externally to assess the financial performance of the entities or business units;
2. The applicable financial reporting framework and the consistency of accounting policies and practices across the group; and
3. The group’s system of internal control, including:
   1. The nature and extent of commonality of controls; (Ref: Para. A96–A99, A102)
   2. Whether, and if so, how, the group centralises activities relevant to financial reporting; (Ref: Para. A100–A102)
   3. The consolidation process used by the group, including sub-consolidations, if any, and consolidation adjustments; and
   4. How group management communicates significant matters that support the preparation of the group financial report and related financial reporting responsibilities in the information system and other components of the group’s system of internal control to management of entities or business units. (Ref: Para. A103–A105)

Considerations When Component Auditors Are Involved

The group auditor shall communicate to component auditors on a timely basis: (Ref: Para. A106)

1. Matters that the group auditor determines to be relevant to the component auditor’s design or performance of risk assessment procedures for purposes of the group audit;
2. In applying ASA 550,^[21] related party relationships or transactions identified by group management, and any other related parties of which the group auditor is aware, that are relevant to the work of the component auditor; and (Ref: Para. A107)
3. In applying ASA 570,^[22] events or conditions identified by group management or the group auditor that may cast significant doubt on the group’s ability to continue as a going concern that are relevant to the work of the component auditor.

The group auditor shall request component auditors to communicate on a timely basis:

1. Matters related to the financial information of the component that the component auditor determines to be relevant to the identification and assessment of the risks of material misstatement of the group financial report, whether due to fraud or error;
2. Related party relationships not previously identified by group management or the group auditor; and (Ref: Para. A107)
3. Any events or conditions identified by the component auditor that may cast significant doubt on the group’s ability to continue as a going concern.

In applying ASA 315,^[23] based on the understanding obtained in paragraph 30, the group auditor shall take responsibility for the identification and assessment of the risks of material misstatement of the group financial report, including with respect to the consolidation process. (Ref: Para. A108–A113)

Considerations When Component Auditors Are Involved

In applying ASA 315,^[24] the group auditor shall evaluate whether the audit evidence obtained from the risk assessment procedures performed by the group auditor and component auditors provides an appropriate basis for the identification and assessment of the risks of material misstatement of the group financial report. (Ref: Para. A114–A115)

In applying ASA 320^[25] and ASA 450,^[26] when classes of transactions, account balances or disclosures in the group financial report is disaggregated across components, for purposes of planning and performing audit procedures, the group auditor shall determine:

1. Component performance materiality. To address aggregation risk, such amount shall be lower than group performance materiality. (Ref: Para. A116–A120)
2. The threshold above which misstatements identified in the component financial information are to be communicated to the group auditor. Such threshold shall not exceed the amount regarded as clearly trivial to the group financial report. (Ref: Para. A121)

Considerations When Component Auditors Are Involved

The group auditor shall communicate to the component auditor the amounts determined in accordance with paragraph 35. (Ref: Para: A122–A123)

In applying ASA 330,^[27] the group auditor shall take responsibility for the nature, timing and extent of further audit procedures to be performed, including determining the components at which to perform further audit procedures and the nature, timing and extent of the work to be performed at those components. (Ref: Para. A124–A139)

Consolidation Process

The group auditor shall take responsibility for designing and performing further audit procedures to respond to the assessed risks of material misstatement of the group financial report arising from the consolidation process. This shall include: (Ref: Para. A140)

1. Evaluating whether all entities and business units have been included in the group financial report as required by the applicable financial reporting framework and, if applicable, for designing and performing further audit procedures on sub-consolidations;
2. Evaluating the appropriateness, completeness and accuracy of consolidation adjustments and reclassifications; (Ref: Para. A141)
3. Evaluating whether management’s judgements made in the consolidation process give rise to indicators of possible management bias; and
4. Responding to assessed risks of material misstatement due to fraud arising from the consolidation process.

If the financial information of an entity or business unit has not been prepared in accordance with the same accounting policies applied to the group financial report, the group auditor shall evaluate whether the financial information has been appropriately adjusted for purposes of preparing and presenting the group financial report.

If the group financial report includes the financial information of an entity or business unit with a financial reporting period-end that differs from that of the group, the group auditor shall take responsibility for evaluating whether appropriate adjustments have been made to that financial information in accordance with the applicable financial reporting framework.

Considerations When Component Auditors Are Involved

When the group auditor involves component auditors in the design or performance of further audit procedures, the group auditor shall communicate with the component auditor about matters that the group auditor or component auditor determine to be relevant to the design of responses to the assessed risks of material misstatement of the group financial report.

For areas of higher assessed risks of material misstatement of the group financial report, or significant risks identified in accordance with ASA 315, on which a component auditor is determining the further audit procedures to be performed, the group auditor shall evaluate the appropriateness of the design and performance of those further audit procedures. (Ref: Para. A142)

When component auditors perform further audit procedures on the consolidation process, including on sub-consolidations, the group auditor shall determine the nature and extent of direction and supervision of component auditors and the review of their work. (Ref: Para. A143)

The group auditor shall determine whether the financial information identified in the component auditor’s communication (see paragraph 45(a)) is the financial information that is incorporated in the group financial report.

The group auditor shall request the component auditor to communicate matters relevant to the group auditor’s conclusion with regard to the group audit. Such communication shall include: (Ref: Para. A144)

1. Identification of the financial information on which the component auditor has been requested to perform audit procedures;
2. Whether the component auditor has performed the work requested by the group auditor;
3. Whether the component auditor has complied with the relevant ethical requirements, including those related to independence, that apply to the group audit engagement;
4. Information about instances of non-compliance with laws or regulations;
5. Corrected and uncorrected misstatements of the component financial information identified by the component auditor and that are above the threshold communicated by the group auditor in accordance with paragraph 36; (Ref: Para. A145)
6. Indicators of possible management bias;
7. Description of any deficiencies in the system of internal control identified in connection with the audit procedures performed;
8. Fraud or suspected fraud involving component management, employees who have significant roles in the group’s system of internal control at the component or others where the fraud resulted in a material misstatement of the component financial information;
9. Other significant matters that the component auditor communicated or expects to communicate to component management or those charged with governance of the component;
10. Any other matters that may be relevant to the group audit, or that the component auditor determines are appropriate to draw to the attention of the group auditor, including exceptions noted in the written representations that the component auditor requested from component management; and
11. The component auditor’s overall findings or conclusions. (Ref: Para. A146)

The group auditor shall:

1. Discuss significant matters arising from communications with the component auditor, including those in accordance with paragraph 45, with the component auditor, component management or group management, as appropriate; and
2. Evaluate whether communications with the component auditor are adequate for the group auditor’s purposes. If such communications are not adequate for the group auditor’s purposes, the group auditor shall consider the implications for the group audit. (Ref: Para. A147)

The group auditor shall determine whether, and the extent to which, it is necessary to review additional component auditor audit documentation. In making this determination, the group auditor shall consider: (Ref: Para. A148–A149)

1. The nature, timing and extent of the work performed by the component auditor;
2. The competence and capabilities of the component auditor as determined in accordance with paragraph 26(a); and
3. The direction and supervision of the component auditor and review of their work.

If the group auditor concludes that the work of the component auditor is not adequate for the group auditor’s purposes, the group auditor shall determine what additional audit procedures are to be performed, and whether they are to be performed by a component auditor or by the group auditor.

In applying ASA 560,^[28] the group auditor shall take responsibility for performing procedures, including, as appropriate, requesting component auditors to perform procedures, designed to identify events that may require adjustment of, or disclosure in, the group financial report. (Ref: Para. A150)

Considerations When Component Auditors Are Involved

The group auditor shall request the component auditors to notify the group auditor if they become aware of subsequent events that may require adjustment of, or disclosure in, the group financial report. (Ref: Para. A150)

In applying ASA 330,^[29] the group auditor shall evaluate whether sufficient appropriate audit evidence has been obtained from the audit procedures performed, including from the work performed by component auditors, on which to base the group audit opinion. (Ref: Para. A151– A155)

The group engagement partner shall evaluate the effect on the group audit opinion of any uncorrected misstatements (whether identified by the group auditor or communicated by component auditors) and any instances when there has been an inability to obtain sufficient appropriate audit evidence. (Ref: Para. A156)

The auditor’s report on the group financial report shall not refer to a component auditor, unless required by law or regulation to include such reference. If such reference is required by law or regulation, the auditor’s report shall indicate that the reference does not diminish the group engagement partner’s or the group engagement partner’s firm’s responsibility for the group audit opinion. (Ref: Para. A157–A158)

Communication with Group Management

The group auditor shall communicate with group management an overview of the planned scope and timing of the audit, including an overview of the work to be performed at components of the group. (Ref: Para. A159)

If fraud has been identified by the group auditor or brought to its attention by a component auditor (see paragraph 45(h)), or information indicates that a fraud may exist, the group auditor shall communicate this on a timely basis to the appropriate level of group management in order to inform those with primary responsibility for the prevention and detection of fraud of matters relevant to their responsibilities. (Ref: Para. A160)

A component auditor may be required by statute, regulation or other reasons to express an audit opinion on the financial report of an entity or business unit that forms part of the group. In that case, the group auditor shall request group management to inform management of the entity or business unit of any matter of which the group auditor becomes aware that may be significant to the financial report of the entity or business unit, but of which management of the entity or business unit may be unaware. If group management refuses to communicate the matter to management of the entity or business unit, the group auditor shall discuss the matter with those charged with governance of the group. If the matter remains unresolved, the group auditor, subject to legal and professional confidentiality considerations, shall consider whether to advise the component auditor not to issue the auditor’s report on the financial report of the entity or business unit until the matter is resolved. (Ref: Para. A161–A162)

Communication with Those Charged with Governance of the Group

The group auditor shall communicate the following matters with those charged with governance of the group, in addition to those required by ASA 260^[30] and other ASAs: (Ref: Para. A163)

1. An overview of the work to be performed at the components of the group and the nature of the group auditor’s planned involvement in the work to be performed by component auditors. (Ref: Para. A164)
2. Instances when the group auditor’s review of the work of a component auditor gave rise to a concern about the quality of that component auditor’s work, and how the group auditor addressed the concern.
3. Any limitations on the scope of the group audit, for example, significant matters related to restrictions on access to people or information.
4. Fraud or suspected fraud involving group management, component management, employees who have significant roles in the group’s system of internal control or others when the fraud resulted in a material misstatement of the group financial report.

Communication of Identified Deficiencies in Internal Control

In applying ASA 265,^[31] the group auditor shall determine whether any identified deficiencies in the group’s system of internal control are required to be communicated to those charged with governance of the group or group management. In making this determination, the group auditor shall consider deficiencies in internal control that have been identified by component auditors and communicated to the group auditor in accordance with paragraph 45(g). (Ref: Para. A165)

In accordance with ASA 230,^[32] the audit documentation for a group audit engagement needs to be sufficient to enable an experienced auditor, having no previous connection with the audit, to understand the nature, timing and extent of audit procedures performed, the evidence obtained, and the conclusions reached with respect to significant matters arising during the group audit. In applying ASA 230,^[33] the group auditor shall include in the audit documentation: (Ref: Para. A166–A169, A179–A182)

1. Significant matters related to restrictions on access to people or information within the group that were considered before deciding to accept or continue the engagement, or that arose subsequent to acceptance or continuance, and how such matters were addressed.
2. The basis for the group auditor’s determination of components for purposes of planning and performing the group audit. (Ref: Para. A170)
3. The basis for the determination of component performance materiality, and the threshold for communicating misstatements in the component financial information to the group auditor. 
4. The basis for the group auditor’s determination that component auditors have the appropriate competence and capabilities, including sufficient time, to perform the assigned audit procedures at the components. (Ref: Para. A171)
5. Key elements of the understanding of the group’s system of internal control in accordance with paragraph 30(c);
6. The nature, timing and extent of the group auditor’s direction and supervision of component auditors and the review of their work, including, as applicable, the group auditor’s review of additional component auditor audit documentation in accordance with paragraph 47. (Ref: Para. A172–A178)
7. Matters related to communications with component auditors, including:
   1. Matters, if any, related to fraud, related parties or going concern communicated in accordance with paragraph 32.
   2. Matters relevant to the group auditor’s conclusion with regard to the group audit, in accordance with paragraph 45, including how the group auditor has addressed significant matters discussed with component auditors, component management or group management.
8. The group auditor’s evaluation of, and response to, findings or conclusions of the component auditors about matters that could have a material effect on the group financial report.