Reference no: EM132816315

Question - Global Wings Holdings Bhd (GWH) is an airline company that has been established over 10 years, with three subsidiaries or components namely Global Wings Airlines Sdn Bhd, GW Insurance Sdn Bhd and GW Food & Catering Sdn Bhd. Wendy & Partners, has been appointed to audit the group financial statements of GWH. While, each component company appoints their own auditors to perform the financial statement audit. Wendy & Partners is aware of the International Standard of Auditing (ISA) 600 on Special Considerations - Audits of Group Financial Statements (Including the Work of Component Auditors) which outlines the group auditor's responsibility prior to forming an audit opinion on the group financial statements. Additionally, considering the fact that the airline industry is largely affected by global Covid-19 pandemic, the group auditor need understand that the consolidation process between GWH and its subsidiaries can be very complex thus, exposed to high degree of risk.

Required -

(a) In order to be satisfied that the three components are unlikely to introduce material errors, as the group auditor, Wendy & Partners shall perform further work to reduce inherent risk at group level. Discuss the stages in audit process that the group auditor needs to undertake.

(b) While, ISA 600 outlines the requirements on communication between parent and component auditor. Discuss three among key matters that must be communicated with component auditors.

(c) Discuss two related issues related to joint auditing if Wendy & Partners and another audit firm are jointly appointed perform an audit on a group financial statement.