Managing group audit risk in a multicomponent audit setting
© 2017 John Wiley & Sons Ltd. This paper considers the challenges in planning the scope of auditing procedures in a group audit setting for an entity with geographically dispersed components which vary in risk characteristics. Auditing all the components for a complex group entity is often inf...
| Main Authors: | , , |
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| Format: | Journal Article |
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Wiley-Blackwell
2017
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| Online Access: | http://hdl.handle.net/20.500.11937/62436 |
| _version_ | 1848760851008323584 |
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| author | Graham, L. Bedard, J. Dutta, Saurav |
| author_facet | Graham, L. Bedard, J. Dutta, Saurav |
| author_sort | Graham, L. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | © 2017 John Wiley & Sons Ltd. This paper considers the challenges in planning the scope of auditing procedures in a group audit setting for an entity with geographically dispersed components which vary in risk characteristics. Auditing all the components for a complex group entity is often infeasible, hence the auditor faces risk from components not audited, as well as the normal sampling risk resulting from applying audit procedures to certain components. Auditing standards do not explain how to consider the risk factors and consider what portion of a multiple component entity should be selected for audit to be able to issue an unqualified audit opinion on the group. In this paper we describe a step-by-step method for determining a minimum number of component audits needed to support an aggregate low level of audit risk of material misstatement. The paper responds to calls from academics, practitioners, and standards-setters for theoretically valid and practically feasible solutions to the group audit problem, using a method that combines professional judgment and experience with basic statistical principles in an ensemble approach. |
| first_indexed | 2025-11-14T10:22:20Z |
| format | Journal Article |
| id | curtin-20.500.11937-62436 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T10:22:20Z |
| publishDate | 2017 |
| publisher | Wiley-Blackwell |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-624362018-10-12T07:19:45Z Managing group audit risk in a multicomponent audit setting Graham, L. Bedard, J. Dutta, Saurav © 2017 John Wiley & Sons Ltd. This paper considers the challenges in planning the scope of auditing procedures in a group audit setting for an entity with geographically dispersed components which vary in risk characteristics. Auditing all the components for a complex group entity is often infeasible, hence the auditor faces risk from components not audited, as well as the normal sampling risk resulting from applying audit procedures to certain components. Auditing standards do not explain how to consider the risk factors and consider what portion of a multiple component entity should be selected for audit to be able to issue an unqualified audit opinion on the group. In this paper we describe a step-by-step method for determining a minimum number of component audits needed to support an aggregate low level of audit risk of material misstatement. The paper responds to calls from academics, practitioners, and standards-setters for theoretically valid and practically feasible solutions to the group audit problem, using a method that combines professional judgment and experience with basic statistical principles in an ensemble approach. 2017 Journal Article http://hdl.handle.net/20.500.11937/62436 10.1111/ijau.12103 Wiley-Blackwell unknown |
| spellingShingle | Graham, L. Bedard, J. Dutta, Saurav Managing group audit risk in a multicomponent audit setting |
| title | Managing group audit risk in a multicomponent audit setting |
| title_full | Managing group audit risk in a multicomponent audit setting |
| title_fullStr | Managing group audit risk in a multicomponent audit setting |
| title_full_unstemmed | Managing group audit risk in a multicomponent audit setting |
| title_short | Managing group audit risk in a multicomponent audit setting |
| title_sort | managing group audit risk in a multicomponent audit setting |
| url | http://hdl.handle.net/20.500.11937/62436 |