This master thesis conducts an analysis and assessment of the challenges that occur when performing a group audit. Performing a group audit can be very complex and requires the group auditor to accumulate total knowledge and understanding of each component in the group. This will naturally lead to a greater amount of risks related to the audit compared to a regular audit. The group auditor does not necessarily audit every single component in the group. Hence, the person has to trust the component auditor’s work in situations where these are used. In other words, the group auditor has the responsibility for confirming that sufficient audit evidence is obtained for the consolidated financial statements, and that no significant findings have occurred throughout the audit. The analyses are achieved through an empirical study of a cross-national sample of audit standards together with interviews from experts, practical auditors, quality control, and other regulatory authorities together with theoretical and scientific articles, in order to achieve a broad picture of the situation. The analyses find that the main challenges faced in a group audit is the fact that the standard leaves a variety of important decisions to professional skepticism. This is in relation to the collaboration with component auditors, in determining the scope of the standard when it comes to smaller and medium-sized companies and in determining the amount of audit procedures when the group auditor observe the use of a Shared Service Center. The thesis reaches the overall conclusion, that the update of the standard will convert the standard towards PCAOB and be more complex, yet remain principle oriented. It is discussed further that the future in auditing, with digitalization and higher demand for more quality-oriented audits, leads to the presence of more harmonizing mechanisms in the international auditing industry. The study however, and in spite of this, predicts that ISA 600 will remain principle oriented..
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||129|