Multiple Location Considerations 2091



  • I’m facing a situation here…
    We have a non-consolidated subsidiary witch is recorded by equity method. But this location has a material equity effect on the holding financial statements.
    Should this company be audited as a multiple location? Or should we map only Related party controls and test the equity calculation?
    Thanks in advance.



  • Good question.
    In theory, being a non-consolildated entity, it does not require having SOX controls tested. However, since it does have a material impact on your consolidated financials statements, you do need to identify some controls to ensure that you are picking up your correct share of equity income. I would suggest that you have the entity audited, but do not need to put SOX controls in place other than to ensure that you are properly recording your share of income and that your carrying value of the investment is not misstated.



  • Thanks for the reply.
    That’s exactly what we are planning. Any different suggestion will be welcome.
    Best regards.


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