Communications Between Predecessor and Successor Auditors

3751 Words Apr 24th, 2013 16 Pages
Communications Between Predecessor and Successor Auditors

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AU Section 315

Communications Between Predecessor and Successor Auditors
(Supersedes SAS No. 7.) Source: SAS No. 84; SAS No. 93. Effective with respect to acceptance of an engagement after March 31, 1998, unless otherwise indicated.

Introduction
.01 This section provides guidance on communications between predecessor and successor auditors when a change of auditors is in process or has taken place. It also provides communications guidance when possible misstatements are discovered in financial statements reported on by a predecessor auditor. This section applies whenever an independent auditor is considering accepting an engagement to audit or reaudit (see paragraph
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This obligation applies whether or not the successor auditor accepts the engagement.

Communications Before Successor Auditor Accepts Engagement
.07 Inquiry of the predecessor auditor is a necessary procedure because the predecessor auditor may be able to provide information that will assist the successor auditor in determining whether to accept the engagement. The successor auditor should bear in mind that, among other things, the predecessor auditor and the client may have disagreed about accounting principles, auditing procedures, or similarly significant matters. .08 The successor auditor should request permission from the prospective client to make an inquiry of the predecessor auditor prior to final acceptance of the engagement. Except as permitted by the Rules of the Code of Professional Conduct, an auditor is precluded from disclosing confidential information obtained in the course of an engagement unless the client specifically consents. Thus, the successor auditor should ask the prospective client to authorize the predecessor auditor to respond fully to the successor auditor 's inquiries. If a prospective client refuses to permit the predecessor auditor to respond or limits the response, the successor auditor should inquire as to the reasons and consider the implications of that refusal in deciding whether to accept the engagement. .09 The successor auditor should make specific
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