Referred work means audit procedures conducted under the instruction of the parent company’s external auditor overseas, generally performed by component auditors for subsidiary in Japan.
Referred work would be usually performed by affiliated firm of parent company’s auditor if the consolidated subsidiary accounted for significant part from the perspective of sales-size and total assets-size. However, it is not so unusual practice to ask individual CPA or small-sized audit firm, if the size of subsidiary was not so big. This is not really known, the auditors performing referred works for subsidiary are completely regarded as different component even if they belong to the same group firms. Which means there would be no change in audit procedures required for referred work whether the component auditor was an individual CPA or belonged to the same group firm, and audit-hours would not be efficiently reduced even if conducted by same affiliated audit firm.
Rather, inexperienced staff might be assigned for referred work in the case of small-sized consolidated subsidiary, even if you ask Big4 firms. Because well experienced staff members are prioritized to assign for big clients. In such case, you might accumulate complaints in auditor’s performance although high audit fee was always charged. Given these facts, you should consider asking referred works to other individual CPA with affluent experience and expertise.
Our Advantageous Points
In performing Referred Work, proficient CPAs handle it and respond to client request with experience working for Big4 firms and involved in referred works for subsidiaries of listed entity overseas. In addition to ordinary audit services, we also provide flexible advice on closing procedures in accordance with IFRS and US-GAAP. Our audit quality would not be so different from Big4 firms since well experienced CPAs lead referred work. We try to implement audit procedures by minimum number of staff members, which is different from big audit firms processing systematically with many professional’s involvement. Therefore, we can present reasonable service fees to clients. Please feel free contact us and ask details of our services if you are annoyed with expensive audit fee for the subsidiary.