Determining whether a subsidiary, division, or other unit of the consolidated entity is material is a matter of audit judgment. For purposes of applying this provision, is the term «issuer» restricted to the legal entity typically the parent company that issues the securities? Under the general standard:. The audit committee should consider whether a relationship with or service provided by an auditor: a creates a mutual or conflicting interest with their audit client; b places them in the position of auditing their own work; c results in their acting as management or an employee of the audit client; or d places them in a position of being an advocate for the audit client.