Which statement best reflects the role of component auditors in a group audit?

The selected answer accurately highlights the role of component auditors in a group audit by emphasizing their responsibility to perform specific assessments assigned by the lead auditor. In a group audit situation, the lead auditor co-ordinates with component auditors who are responsible for portions of the financial statements pertaining to specific components, locations, or subsidiaries. These component auditors carry out tasks such as testing controls, performing substantive tests, and providing information that contributes to the overall understanding of the group’s financial position.

Their work is critical as it feeds into the overall audit conclusions drawn by the lead auditor. The lead auditor must evaluate the work done by the component auditors to ensure it is sufficient and appropriate to support the overall audit opinion for the group. Therefore, this collaboration is essential for the effectiveness of the audit process, as each component auditor provides necessary insights and assessments that facilitate the formation of a complete and accurate audit opinion for the group’s consolidated financial statements.