The purpose of the requirement inhaving communication between thepredecessor and successor auditors isto: *Allow the predecessor to discloseO information, which would otherwise beconfidential.Help the successor auditor to evaluatewhether to accept the engagement.Ensure the predecessor collects allO unpaid fees prior to a change inauditor.Help the client by facilitating thechange of auditors.

Option 1 : AS per rules of Professional Conduct, Auditor is precluded from disclosing confidential…

Answered: The purpose of the requirement in…

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Completing A Quality Audit

Section: Chapter Questions

Problem 39CYBK

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A predecessor auditor will ordinarily initiate communication with the successor auditor: Prior to the successor's acceptance of the engagement and subsequent to the successor's acceptance of the engagement, Just prior to the successor's acceptance of the engagement but not subsequent to the successor's acceptance of the engagement, Not prior to the successor's acceptance of the engagement but subsequent to the successor's acceptance of the engagement, Neither one
Prior to the acceptance of an audit engagement with a client who has terminated the services of the predecessor auditor, the CPA should a. Contact the predecessor auditor without advising the prospective client and request a complete report of the circumstances leading to the termination with the understanding that all information disclosed will be kept confidential. b. Accept the engagement without contacting the predecessor auditor since the CPA can include audit procedures to verify the reason given by the client for the termination. c. Not communicate with the predecessor auditor because this would, in effect, be asking the auditor to violate the confidential relationship between auditor and client. d. Advise the client of the intention to contact the predecessor auditor and request permission for the contact.
Which of the following information should a successor auditor obtain during the inquiry of the predecessor auditor before accepting engagement? i) Information about integrity of management ii) Disagreement with management concerning auditing procedures iii) Review of internal control system.iv) Organisation structure a) (i) and (ii) b) (ii) and (iii) c) (i) , (ii) and (iii) d) i) and (iii) The audit engagement letter, generally, should include a reference to each of the following except a)limitations of auditing b)responsibilities of management with respect to audit work c)expectation of receiving a written management representation letter. d)a description of the auditor’s method of sample selection. 3. An auditor who accepts an audit but does not possess the industry expertise of the business entity should a) engage…

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