Group accounting audit

NotesPaper exam

Always think of the basics

Acquisition in year

  • I/S pro rate inclusion of sub

  • Calculate GW

  • Pro rata NCI in the year

  • Think about component auditors

  • Materiality will now increase

  • Ensure sub uses same accounting policies and same year end as parent

  • Analytical procedures may be enough for the audit of this acquisition (if its in the same industry as us)

  • New related party transactions (with the sub)

Further acquisition?

e.g. from 60% to 80%

  • Any "profit" goes to equity NOT I/S

Partial Disposal

eg. 80% to 60%

  • Any profit goes to equity NOT I/S

Full Disposal

eg 60% to 30%

  • Any profit goes to I/S

  • The sub is taken out completely from group accounts (NA, GW, NCI)

  • Is replaced by an associate at FV

NotesPaper exam