Choice "A" is correct. Under U.S. GAAS, if, among other requirements, the group engagement partner is satisfied as to the independence and the professional reputation of the component auditor, the group engagement partner may express an opinion on the financial statements taken as a whole without making reference to the audit of the component auditor.
Choice "b" is incorrect. Whether or not an unmodified opinion is issued is not the determining factor as to whether the group engagement partner must make reference to the component auditor.
Choice "c" is incorrect. Whether or not an unmodified opinion is issued on the subsidiary's financial statements is not the determining factor as to whether the group engagement partner must make reference to a component auditor.
Choice "d" is incorrect. If the group engagement partner is unable to review the audit programs and audit documentation of the component auditor, he or she is likely to divide responsibility by making reference to the component auditor in the auditor's report.
