Post 3 months gap between the parent and the subsidiary

Question

Hi,

Anyone please answer the followings:

1. If the Parent company year end close on 31st December 2013 and subsidiary closing date is 31st march 2014. How to consolidate?

2. All the subsidiary and holding companies are audited by different auditors. this case is it required to communicate with external auditors? and clients not agree to communicate with external auditors.

Regards
RR

Answer 1

1. the parent shall consolidate the financial information of the subsidiary using the most recent financial statements of the subsidiary adjusted for the effects of significant transactions or events that occur between the date of those financial statements and the date of the consolidated financial statements. If it is over 03 months you may have to prepare a new set of financial statements in line with parent year end.

2. It may not be compulsory but better to communicate as they can help in adjusting F/Ss or preparing new F/Ss

Answer 2

on the 2. question.

after the application oF ISA 600, the group auditors are responsibile for the audit of the subsidiary in case of consolidated financial statement. This can be done by communicating with the subsidiary auditors and prividing group referrel instructions.