Parallel Medical Devices is a distributer of medical devises to large hospitals in South America based in Santiago Chile. Their auditor is Pena and Batistella, Contador Publicos. The audit based on International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) is to be a financial statement audit due March 30. A separate report is required for government medical regulators. All subsidiaries should have financial statements converted to the Chilean Peso (CLP). The completed package of audit material should be returned to Pena and Batistella, CPs, on March 15. A completion memorandum in the standard form for Pena and Batistella is required. The completion memorandum should include key accounting issues, disagreements with management and outstanding matters. The audit could include a risk analysis of potential material weakness in internal control and our standard internal control questionnaires. A written representation of management (management letter) should be included in the returned material. A full description of any material differences between financial statements and audit tests is required. Provide any specific details of the client audited.

Required:

Using Illustration 13.5 and the material in this chapter write the ‘General’ and ‘Specific Procedures’ sections of the Group Audit Instructions.

The information in the Group Audit Instruction’s first two sections should include the general information about subsidiaries and audit standards required. Specific procedures include discussion on:

• Reporting package and deadline

• Separate report information

• Currency exchange considerations

• Supplemental statements

• Details about the completion memorandum

• Potential material weakness in internal control

• Written representation of management (management letter) comments

• Material differences

• Specific details of the client audited.