AUDIT
Component audits for Japanese subsidiaries
Connect an overseas group audit with the operations of its Japanese subsidiary. We perform audit procedures on the Japanese entity’s financial information under the group auditor’s instructions and report important matters.
01 / WHAT WE DO
Scope & purpose
When a parent company requests audit work, clarify what must be reported, under which accounting framework and format, and by when. We work with financial information under Japanese GAAP or IFRS and review the group instructions and local operations, including differences between local and parent reporting policies.
02 / PROCESS & HANDOFF
How the work progresses
- Review the group instructionsEngagement scope, roles, schedule and fee proposal
- Agree the plan and preparationAudit plan and local preparation list
- Perform local audit workFindings and significant reporting issues
- Report to the group auditorComponent reporting and significant matters for the Japanese entity
Illustrative workflow. The scope and deliverables are agreed for each engagement.
01Review the group instructions
Confirm the period, parent, group auditor, instructions and reporting deadline. Understand the Japanese entity and consider independence, resources and acceptance conditions.
Output / next handoff: Engagement scope, roles, schedule and fee proposal
02Agree the plan and preparation
Coordinate scope, framework, materiality and reporting formats with the group auditor. Share required records, contacts and dates with the Japanese entity.
Output / next handoff: Audit plan and local preparation list
03Perform local audit work
Examine financial information and evidence, understand processes and controls and carry out planned procedures. Share significant accounting and reporting matters promptly.
Output / next handoff: Findings and significant reporting issues
04Report to the group auditor
Report work, findings and conclusions in line with the instructions and agreed formats. Respond to queries, additional procedures and working paper reviews as required.
Output / next handoff: Component reporting and significant matters for the Japanese entity
03 / DELIVERABLES
Deliverables & their use
- Reporting to the group auditor under the agreed instructions
- Timely communication of significant issues
- Local preparation and reporting coordination
The package links figures and conclusions to source information and review records. Its precise contents are agreed for the engagement.
04 / DISCUSS YOUR NEEDS
Getting started & engagement conditions
Share the parent and group auditor contacts, available instructions, reporting formats, deadlines, financial statements, trial balance and group reporting package. Instructions need not be final to start a discussion. A separate local statutory or voluntary audit, or a standalone audit report for the Japanese entity, requires its own defined scope.
Related entities and independence ↗LET’S TALK
Let’s work out your next step.
You do not need a finalized brief. Start with the challenge or the work you would like to entrust.