The Key Stages of a Group Audit
1. Planning & Defining Scope
What Happens
• Understand the group structure, number of subsidiaries, types of entities, joint ventures.
• Decide which subsidiaries/entities to include based on size, risk, regulatory obligations.
• Meet with management / board to set expectations and define key objectives.
Why It Matters
Sets the foundation; ensures audit effort is focused where risks are highest; helps manage resources and stakeholder expectations.
2. Risk Assessment
What Happens
• Identify risks at both group level and individual entity level (financial reporting, operational, compliance).
• Evaluate likelihood and impact of these risks.
• Prioritize the risks to allocate audit resources accordingly.
Why It Matters
Allows auditors to tailor their audit strategy to what could go wrong; helps avoid surprises.
3. Coordination with Subsidiaries
What Happens
• Establish clear communication channels with each entity’s management and internal audit (if applicable).
• Set out information and documentation requirements and timing.
• Clarify roles & responsibilities (who will provide what, when, who the auditors will deal with).
Why It Matters
Prevents delays; ensures consistency; helps reduce duplication and misunderstandings.
4. Fieldwork & Testing
What Happens
• On-site visits or virtual assessments to collect evidence.
• Tests include control testing, substantive testing, and analytical procedures.
• Observe operations, verify transactions, inspect records.
Why It Matters
Core of audit, where findings are gathered; crucial for accuracy and verifiability.
5. Consolidation of Findings
What Happens
• Combine audit results from all subsidiaries.
• Identify cross-entity issues or common weaknesses.
• Highlight material anomalies or non-compliances.
Why It Matters
Gives a group wide picture; ensures that important issues are not siloed.
6. Reporting
What Happens
• Draft the audit report: executive summary, detailed findings, recommendations.
• Present findings to board / audit committee.
• Emphasize transparency; include both high-level and detailed observations.
Why It Matters
Ensures oversight bodies are informed; helps the company act on issues; builds trust.
7. Follow-Up & Continuous Improvement
What Happens
• Management develops action plans to address issues.
• Auditors perform follow-up reviews to check if corrective measures are effective.
• Embed improvements into processes and control systems.
Why It Matters
Strengthens the group’s control environment; closing the loop makes audits more than just compliance exercises.
8. Regulatory Compliance & Ethics
What Happens
• Ensure all work follows Singapore’s Companies Act, Singapore Financial Reporting Standards (FRS), and the relevant auditing standards.
• Auditors must maintain independence, integrity, objectivity.
• Keep up to date with changes in regulation
Why It Matters
Non-compliance can lead to legal, reputational, or financial risk. Ethical conduct preserves the trust stakeholders place in financial reports.