Question

A component auditor is typically_______.

A) Another audit partner in the same office
B) A different partner at a different office of the same firm
C) A different accounting firm that audits a component or subsidiary of the parent company
D) A different accounting firm that audits a component of the subsidiary company.

Answer 1

A component auditor is typically a different accounting firm that audits a component or subsidiary of the parent company. The component auditor's role is to assess the financial statements and internal controls of the specific component or subsidiary.

Step-by-step explanation:

A component auditor is typically C) A different accounting firm that audits a component or subsidiary of the parent company.

When a company has multiple components or subsidiaries, it may hire a different accounting firm to audit each of them. This is done to ensure independence and objectivity in the audit process. The component auditor's role is to assess the financial statements and internal controls of the specific component or subsidiary.