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Published 1 (2023-05-01)

handle is hein.gao/gaoooj0001 and id is 1 raw text is: U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 May 1, 2023 Mr. Willie Botha Technical Director International Auditing and Assurance Standards Board 529 Fifth Avenue New York, NY 10017 GAO's Response to the International Auditing and Assurance Standards Board's Exposure Draft Proposed Part 10, Audits of Group Financial Statements of the Proposed International Standards of Auditing for Audits of Financial Statements of Less Complex Entities This letter provides GAO's comments on the International Auditing and Assurance Standards Board's (IAASB) Proposed Part 10, Audits of Group Financial Statements of the Proposed International Standards of Auditing for Audits of Financial Statements of Less Complex Entities. GAO promulgates generally accepted government auditing standards, which provide professional standards for auditors of government entities in the United States. We do not support the IAASB's efforts to make group audit part of a standard for the audit of financial statements of less complex entities (LCE). We believe that group audit is inherently complex and not appropriate for LCE financial statement audit. We believe that there is an inherent risk of group audit for LCEs being applied to more complex entities. In addition, we find that the qualitative characteristics are insufficient to identify appropriate circumstances for using a group audit for an LCE financial statement audit. While we agree with the exclusion of component auditors in group audits of LCEs, we find that the exclusion of requirements and application material for how to use component auditors in the limited circumstances allowed problematic. The IAASB seeks comment on three specific questions. Our responses to the questions follow in the enclosure to this letter. Thank you for the opportunity to comment. If you have questions about this letter or would like to discuss any of our responses, please feel free to contact me at (202) 512-3133 or dalkinj@gao.gov. James R. Dalkin Director Financial Management and Assurance Enclosure Page 1

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