Question: Fred is a partner at D Y an international professional services

Fred is a partner at D&Y, an international professional services firm. Fred’s primary client, Green Investments, is a publicly traded holding company with subsidiaries around the world. Most of Green Investment’s subsidiaries are audited by D&Y’s worldwide affiliates. However, two of their subsidiaries are audited by local firms not affiliated with D&Y. One of these subsidiaries accounts for approximately 10% of Green’s annual income, and the other accounts for only .3% of Green’s annual income. This year, all of Green Investments subsidiaries received a clean audit opinion.

1. List elements of audit planning impacted by Green Investments structure of multiple subsidiaries.
2. Identify how the ICFR audit changes because of multiple locations. Particularly consider the impact of the overseas operations.
3. How is the audit plan affected by the two subsidiaries audited by other CPA firms? Address each subsidiary in your answer.

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  • CreatedJanuary 21, 2015
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