Reliance on the Work of Other Auditors

The principal auditor or the primary auditor is solely responsible for the holding company's accounts. So here it is inevitable but that in large groups the holding company's auditor therefore the principal auditor are not forever the auditors of the subsidiary company, consequently, there is require for them to rely on the work of another auditors. The student have to notice such the principle auditors are fully responsible for their view on the group accounts and necessitate not for this cause refer in their report to the fact that the accounts of some associated or subsidiary company have been audited through another firms. I refer you to the following significant topics covered in the ISA. Availability of information, accounting policies, scope of work of the secondary auditors or another auditors, the materiality of the amounts included. Whether the principal auditor is satisfied so then the accounts present a fair and true view and comply along with the Companies Act the auditor will be capable to issue a an unqualified audit report. But qualification will be essential in the following circumstances.

1. The material subsidiary whether qualified so that there may be require for this qualification to be noticed in the holding company's report.

2. Failure through the principal auditor to acquire satisfactory information along with regard to material amounts or material subsidiary that has been consolidated from an audited account.

3. Material disagreement along with any of the consolidation calculations.

4. Non-compliance along with legal or professional requirements as far as disclosure is concerned.