Using the work of a component auditor

Up to 1½ marks for each matter explained:

– Compliance with ethical requirements
– Professional competence 
– Sufficient involvement in component auditor’s work/resources
– Existence of a regulated environment 
– Assess level of risk in the subsidiary audited by the component auditor

1 mark for each relevant procedure:

– Review the local ethical code (if any) and compare with the IESBA Code
– Obtain confirmation from Clapton & Co of adherence to any local ethical code and the IESBA Code
– Establish whether Clapton & Co is a member of an auditing regulatory body, and the professional qualifications issued by that body
– Obtain confirmations from the professional body to which Clapton & Co belong, or the authorities by which it is licensed
– Discuss the audit methodology used by Clapton & Co in the audit of Lynott Co, and compare it to those used under ISAs
– A questionnaire or checklist could be used to provide a summary of audit procedures used
– Ascertain the quality control policies and procedures used by Clapton & Co, both firm-wide and those applied to individual audit engagements
– Request any results of monitoring or inspection visits conducted by the regulatory authority under which Clapton & Co operates

Maximum marks 8

Professional marks for the overall presentation, structure and logical flow of the briefing notes, and for the clarity of the evaluation and explanations provided.

Maximum marks 4