Rowe & Myers audits the financial statements of Dunbar Electronics. During the a

Question

Rowe & Myers audits the financial statements of Dunbar Electronics. During the audit, Ross & Myers engaged Jones & Abbot, a Canadian public accounting firm, as a component auditor to audit Dunbar's wholly owned Canadian subsidiary.

1) Should Rowe & Myers make reference to the component auditor in its audit report? Explain.

2) Assume that Jones & Abbott issued a qualified report on the Canadian subsidiary. Should Rowe & Myers include the same qualification in its report on Dunbar Electronics?

Explanation / Answer

1) As per the new AU-C section 600 the component unit like in the above case mentioned should be refered in the group financial report.ed.

2) No, it need not be same as both subsidary and parent company audit report should be seperate and mentioned seperately as per the audit conduct

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