Question

What are the benefits and costs of a Group Audit?

Answer 1

Group audit refers to audit of financial statements of group of bussiness.

For example we have many group of industries like TATA industries in india have many organizations in different industries. So in every year end entire TATA group prepare financial statements of all there organization collectively at on one paper. Audit of that financials is termed as group audit.

Benefits of group audit as follows :-

1. All the organizations use these audited copies in their annual general meeting to explain the entire performance of the group.

2. Based on this audited financial statements all the groups issue dividend for their shares to the shareholders.

3. All the investors and shareholders assess all the information and performance of the company through this type of audited financial statements.

4. If any defects in any of the individual organizations in one group can be compensated by other well performing organization in this type of group financial statements.

Costs of the group audit.

1. Is cost very much high because the auditors have to keep more audit staff for this type of audits.

2. Auditor can give some of the work to other auditors and reduce the burden on one auditor.

3. Auditor need much time to complete this type of audits so it cost more to the organization.

So by all the above given points we came to know that by the group audit there are many benefits and the company incur much cost for conducting these types of audits.

I hope, all the above points and given explanations are useful and helpful to you.

Thank you.