Qualified Audit Report

Qualified Audit Report

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Hello all,

We have a limited company client who has French and German subsidiaries, this year the foreign companies have grown significantly and they now should be preparing group accounts and we need to audit the subs as well as the group.

We are in the final throes (or so we thought!) of preparing the UK company accounts/audit.

If they do not prepare group accounts or have the subs audited can we just qualify the audit report or do we need to take more serious action?

Thanks in advance

Replies (4)

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By Chris Smail
24th Apr 2012 09:46

You had best speak to your institute

They will be the ones who are upset if you do not follow their guidance.

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By Euan MacLennan
24th Apr 2012 10:55

Why no group accounts?

If the group no longer qualifies as small, you should be producing group accounts and can go on and prepare them when you have final accounts for the parent and the two subsidiaries.

If the subsidiaries have not been audited (and this would seem to be a critical failure of audit planning), I think that you will have to disclaim any audit opinion on the group accounts, but as Chris says, talk to your regulator.

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By User deleted
24th Apr 2012 11:08

Some stirrings in the grey matter ...

... along the lines of having to require group accounts for two consequetive years, probably talking out my back passage and haven't time to research this but thought may need considering!

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By petew
24th Apr 2012 11:49

Thanks for comments

We were aware that this might be an issue but client was not very forthcoming on increase in size of German sub.

Spoke with ICAEW who said it was our duty to audit these figures and if we could not then we would have to outsource to local auditors. Went on to say we couldn't just qualify audit report on basis that subs not audited unless we had a cast iron case to say that it was not possible to audit them such as sub being based in war torn country. No excuses for not auditing an EU sub.

Just such a pain that it will almost certianly be a one off exercise as the limits will (probably) be going up from October 2012 year ends onwards.

 

Re company size, does anyone know if the two out of three rule works for groups?

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