According to ISA 600 group audits is the audit of group financial statements. Group include parent entity and its components. In group audit the group auditor who is usually the auditor of parent company even though these are technically two different assignment, audit the consolidated financial statement of the group. In performing the group audit the group auditor will have to make sure that the statement used to make the consolidated financial statement does not contain misstatement material to group as whole also he must make sure that the consolidation process is free from errors.
In ensuring the components of the group financial statements does not contain material misstatement the auditor may audit the components himself or rely on the auditor from the different audit firm. Before relying on the work of component auditor, he must assess the capability and competence of the components of the auditor.