The auditor is not required to ask the predecessor auditor about

The auditor is not required to ask the predecessor auditor about. , Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement? Multiple Choice Disagreements between the predecessor auditor and management as to significant accounting policies and principles. whether there were any differences of opinion between management and the predecessor auditor c. Required information Ch06 Predecessor Successor Auditor Communications (L06-2) Predecessor Successor Auditor Communications Read the case, then answer the questions that follow Audit standards require successor auditors to attempt to communicate with the predecessor before accepting an audit engagement CONCEPT REVIEW: Audit standards require successor auditors to attempt communication with the Aug 31, 2016 · 302. Related AccountingTools The successor will not comment orally or in writing to anyone as a result of the review as to whether the predecessor's audit was performed in accordance with GAAS. In this post, I explain why it's necessary to obtain supporting information for opening balances and how contacting the predecessor auditor is to your advantage. facts that might bear on the integrity of management b. 12 or for publicly held entities, Auditing Standard (AS) 2610. why the predecessor auditor was fired b. Jun 13, 2017 · Successor auditors are required [for privately held entities, AU-C section 510. However, in the opinion of the Council, it would be a healthy practice to communicate. 25 For accounts receivable, if the auditor determines it is not feasible to obtain audit evidence pursuant to paragraph . Matters that may facilitate the evaluation of financial reporting consistency between the current and prior years. Which of the following auditor concerns most likely could be so serious that the auditor would conclude that a financial statement audit cannot be conducted? [The following matter subject to inquiry is effective for audits of fiscal years beginning on or after December 15, 2014. The fees charged for the previous audit. Related AccountingTools Course. Successor auditors need to communicate with predecessor auditors (Blank) accepting the engagement. Dec 5, 2019 · Q. Hill, CPA, has been retained to audit the financial statements of Monday Co. Disagreements the predecessor may have had with management about accounting principles and audit procedures C. 3 days ago · Study with Quizlet and memorize flashcards containing terms like The purpose of the requirement in having communication between the predecessor and successor auditors is to: A) allow the predecessor to disclose information which would otherwise be confidential. disagreements the predecessor may have had with management about accounting principles and audit procedures. 147, Inquiries of the Predecessor Auditor Regarding Fraud and Noncompliance With Laws and Regulations, clarifies Requirements and guidance related to the auditor’s inquiries of a predecessor auditor about matters that will assist the auditor in determining whether to accept the engagement. C) help the client by facilitating the change of auditors Study with Quizlet and memorize flashcards containing terms like When would a CPA conclude that a potential audit engagement should be rejected?, Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement? a. Predecessor Auditor Audits the Adjustments to Prior-Period Financial Statements Q2. Note: Client is not responsible for auditor's working papers custody and Successors auditors can not have access to working papers of predecessor auditors. S. Making a proposal for the audit engagement. Facts that might bear on the integrity of management B. After not sufficiently vetting a potential new client and paying the price for it, I can tell you, 'This part of client acceptance is crucial. before: 2. 2014-002, states that "[t]he amendments to AU sec. C) the predecessors understanding about the reasons for the change of auditors. First Year Audit ConsiderationsHere are three key first year audit considerations:Obtaining information about opening balances Question: Which of the following would a successor auditor ask the predecessor auditor after accepting an audit engagement? -Disagreements between the predecessor auditor and management as to significant accounting policies and principles. A “reasonable request,” as defined in the CPA Ontario Code of Professional Conduct - Guidance - Rule 303, for information related to the client, includes an opportunity for the successor to discuss with the predecessor the following: unusual circumstances, the predecessor auditor decides not to respond fully to the inquiries, the predecessor auditor is expected to clearly state that the response is limited. In these circumstances, the SAS no. Predecessor auditors will help successor auditors to determine whether or not to accept an engagement. org Jul 12, 2022 · Learn how SAS No. 1: A registrant (“successor”) shall not accept an engagement with respect to the practice of public accounting or the provision of a professional service not inconsistent therewith, where the successor is replacing another registrant or other professional (“predecessor”), without first communicating with such predecessor and enquiring whether there are any circumstances that should Oct 11, 2023 · A successor auditor is required to attempt communication with the predecessor auditor prior to: C. at the conclusion of the audit engagement before issuing the audit report before beginning any audit engagement only during the audit . must ask management to authorize the predecessor auditors to discuss confidential information. 3 days ago · The auditor is not required to ask the predecessor auditor about: a) facts that might bear on the integrity of management. 7 Is communication required to prior previous auditor in addition to existing auditor? When a company has changed auditors, according to the Professional Standards: The successor auditor has the responsibility to initiate contact with the predecessor auditor to ask about the client before the engagement is accepted; the predecessor has no responsibility to initiate this contact, even when aware of matters bearing on the integrity of management. A33 Before responding to the auditor’s inquiries made pursuant to paragraph . 2. However, the successor auditor also may audit the adjustments. ' You can avoid many headaches. Which of the following procedures would a CPA most likely perform in the planning phase of a financial statement audit? See full list on pcaobus. When this permission is not given, it is a red flag that the predecessor auditor may have encountered problems with the books of the client. ) Which of the following auditor concerns most likely could be so serious that the auditor wouldconclude that a financial statement audit cannot be conducted?A) The entity has no formal written code of conduct. 40. D) the fees charged for the Jul 20, 2024 · When a successor auditor is appointed to an audit engagement, the successor may need to communicate with the predecessor auditor regarding various issues that are then incorporated into the successor's audit. If predecessor auditors refuse communication, succe Apr 24, 2018 · This installment expands on that theme, providing guidance for when an auditor is requested to reissue an audit report as a predecessor auditor on the financial statements of a former client that are not expected to be restated, but will be presented comparatively with financial statements of a later period audited by a successor. 315 require the auditor to make inquiries regarding the predecessor auditor's understanding of the company's relationships and transactions with related parties and Communicating with a predecessor auditor can be trying. 17) 17) The auditor is not required to ask the predecessor auditor about A) facts that might bear on the integrity of management B) disagreements the predecessor may have had with management about accounting principles and audit procedures the predecessors understanding about the reasons for the change of auditors D)the fees charged for the previous audit. Multiple choice question. B) The integrity of entity's management is suspect. Whether such a review provides The successor auditor has the responsibility to initiate contact with the predecessor auditor to ask about the client before the engagement is accepted; the predecessor has no responsibility to initiate this contact even when aware of matters bearing on the integrity of management. If so, the successor auditor will need the client’s permission to discuss matters with the predecessor auditor. A majority of the ASB members concluded that such an approach would not be practical for the audit of financial statements of a Congratulations! You've won a new audit client. , Risk management activities are undertaken Blank______. The term "successor auditor" refers to an auditor who has accepted an engagement or an Feb 25, 2021 · of the predecessor auditor but would not be required to request management to authorize the predecessor auditor to respond fully to the auditor’s inquiries. 24 based on the auditor’s experience, such as prior years' audit experience with the company or experience with similar engagements where the auditor did not receive confirmation responses, and the auditor’s expectation This lesson focuses on the concept of predecessor and successor auditors and the importance of communication between them when accepting new engagements. As a result, the definitions in SAS no. the fees charged for the previous audit. (Blank) must ask management to authorize the predecessor auditors to discuss confidential information. Now, let's consider the first year audit considerations. Feb 5, 2019 · The purpose of this Statement is to provide guidance on communications between predecessor and successor auditors when a change of auditors has taken place or is in process. How to Conduct an Audit Engagement successor auditor may not be aware of the identity of the predecessor auditor and the predecessor auditor would have no basis to conclude that the management is considering engaging the purported successor auditor. Jun 9, 2006 · predecessor auditor sometimes can be more cost-effective for performing this work. so, whether the predecessor auditor’s opinion was modified. B) disagreements the predecessor may have had with management about accounting principles and audit procedures. 84, it would nevertheless be expected to help the Study with Quizlet and memorize flashcards containing terms like The permanent file of an auditor's working papers generally would not include:, A successor auditor most likely would make specific inquiries of the predecessor auditor regarding:, A successor auditor ordinarily should request to review the predecessor's working papers relating to: and more. disclaim liability. 2 Although not as common, an ERISA Section 103(a)(3)(C) audit may relate to the audit of a 103-12 entity as permitted by Title 29, Labor , U. b) disagreements the predecessor may have had with management about accounting principles and audit procedures. 21] to request that client management 1) inform a predecessor auditor whenever they become aware of information that leads to the belief that financial statements reported on by the predecessor auditor may express an opinion on the financial statements. A) facts that might bear on the integrity of management. The auditor is not required to ask the predecessor auditor about: 1. 84 are as follows: Predecessor auditor. 103-12 of the Department of Labor's indemnities between the Predecessor Auditor, the Client and Successor Auditor (see paragraphs 21 to 28); d) Legal Obligation: The protocols contained in this Guidance Note shall be adapted to the specific circumstances faced by the Predecessor Auditor, who is required to discharge his Successor auditors need to communicate with predecessor auditors _____ accepting the engagement. Although not required by this section, in these circumstances the successor auditor may find the OAG Guidance. We believe that management not authorizing the predecessor auditor to fully respond to the auditor’s inquiries is Mar 4, 2024 · The successor auditor must obtain the permission of the client before discussing audit issues with the predecessor auditor. 12, the predecessor auditor may consider it appropriate to obtain legal advice to determine Predecessor auditors will help successor auditors to determine whether or not to accept an engagement. B) The predecessor auditor's understanding of the reasons for the change of auditors. disagreements the predecessor may have had with management about accounting principles and audit procedures d. The release adopting this provision, PCAOB Release No. The lesson emphasizes that a successor auditor (the current auditor) should make specific and reasonable inquiries of the predecessor auditor (the prior year's auditor) to determine whether to accept the engagement. The predecessor auditor's understanding of the reasons for the change of auditors. 147 requires successor auditors to ask predecessor auditors about fraud and noncompliance with laws and regulations before accepting an auditing engagement. . If the predecessor auditor audits the adjustments to the prior-period financial 3 days ago · Study with Quizlet and memorize flashcards containing terms like Successor auditors need to communicate with predecessor auditors _____ accepting the engagement, _____ auditors must ask management to authorize the predecessor auditors to discuss confidential information, If predecessor auditors refuse communication, successor auditors _____ accept the engagement and more. Audit standards require successor auditors to attempt communication with the predecessor auditors. If predecessor auditors refuse communication, successor auditors _____ accept the engagement. disagreements the predecessor may have had with management about accounting principles and audit procedures 3. Successor auditors: 3. A4. Q. The auditor is not required to ask the predecessor auditor about the fees charged for the previous audit. the fees The successor auditor This is because the successor auditor should ask the predecessor auditor specific questions about the predecessor's evaluation of matters of continuing accounting significance. 11 The successor auditor is not required to ask the predecessor auditor about: a. -The predecessor auditor’s understanding of the reason for the change of auditor. Study with Quizlet and memorize flashcards containing terms like 1. Disagreements between the predecessor auditor and management as to significant accounting policies and principles. C) Procedures requiring separation of duties are subject to 3 days ago · The procedures followed by the auditor in evaluating evidence, In the Reauditing Financial Statements case, all of the following would be appropriate questions to ask a predecessor auditor except: a. In this article, I tell you when to make contact, what inquiries to make, what responses you The successor auditor should request permission from the prospective (at this point) client to make an inquiry of the predecessor auditor, and request that the predecessor auditor be authorized to communicate. Part 2 - Concept Check 1. _____ must ask management to authorize the predecessor auditors to discuss confidential information. the predecessor auditor's report thereon,the results of inquiry of the prede- In preparing the financial statements, management is required to evaluate Jan 8, 2024 · The auditor is not required to ask the predecessor auditor about: A) facts that might bear on the integrity of management. The term "predecessor auditor" refers to an auditor who has resigned or who has been notified that his services have been terminated. Find out what to do if the predecessor auditor does not respond or limits their responses. 7 definitions of a predecessor and successor auditor were not appropriate. Before accepting an engagement to audit a new client, an auditor is required to: make inquiries of the predecessor auditor after obtaining the consent of the prospective client. whether Aug 16, 2022 · These auditor inquiries must be made after management authorizes the predecessor auditor to respond to such inquiries. 3 C. Successor auditors need to communicate with predecessor auditors 2 accepting the engagement. A) The successor auditor has no responsibility to contact the predecessor auditor B) The successor auditor should obtain permission from the entity before contacting the predecessor auditor C) The successor auditor should contact the predecessor regardless of whether the prospective client authorizes contact D) The successor auditor need not . If the prior period’s financial statements were audited by a predecessor auditor, the auditor may be able to obtain sufficient appropriate audit evidence regarding the opening balances by reviewing the predecessor auditor’s working papers. The auditor is not required to ask the predecessor auditor about: a. 1 The provisions of this section are not required if the most recent audited financial statements are more than two years prior to the beginning of the earliest period to be audited by the successor auditor. the predecessor's understanding about the reasons for the change of auditors c. Feb 25, 2021 · authorize the predecessor auditor to respond fully to the auditor’s inquiries? If not, why not, and how would the respondent revise the requirement (for example, by making the procurement of management’s agreement a precondition for the auditor to accept the engagement or requiring the auditor to communicate with the predecessor auditor The auditor is not required to ask the predecessor auditor about. 2 There may be two predecessor auditors: the auditor who reported on the most recent audited SAS No. The predecessor's understanding about the reasons for the change of auditors. b. 3. The current auditor is often asked to submit a proposal to be evaluated with the others. The predecessors must have permission from the previous client before sharing information with the successor auditors. When a successor auditor takes over an audit engagement, it is essential for them to communicate with the predecessor auditor to ensure a smooth transition and to gather any necessary information or assistance. facts that might bear on the integrity of management. And what the predecessor auditor must do. The successor auditor will not provide expert testimony, litigation support services, or comment on issues relating to the quality of the predecessor's audit. It is not necessary to review the engagement letter. However, copy or extracts of the working papers can be made available to those who need them only with the prior approval of the owner of such working papers. Code of Federal Regulations, Section 2520. The successor auditor is not required to ask the predecessor auditor about A. Further, the ASB believes that the requirement for the successor auditor to inquire about the reasons for a refusal to authorize 3 When the most recent financial statements have been compiled or reviewed in accordance with the Statements on Standards for Accounting and Review Services, the accountant who reported on those financial statements is not a predecessor auditor. The The successor auditor is required to ask the predecessor auditor regarding its understanding of the reason for the change in auditors, facts that might affect the integrity of the client's management and the possible disagreement the auditor might have encountered regarding its audit procedures and accounting principles. Facts known to the predecessor auditor that might bear on the integrity of management. Even so, audit standards require that you (at least try to) contact them. As a predecessor auditor, we should supply “reasonable” information to the successor auditor concerning the client. c) the fees charged for the previous audit. Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement? A) Disagreements between the predecessor auditor and management as to significant accounting policies and principles. 6 Is tax auditor, appointed for conducting special audit under the Income Tax Act, required to communicate with statutory auditor? Ans: It is not mandatory. auditor, prior to accepting an initial audit or reaudit engagement, to request that management authorize the predecessor auditor to respond fully to the auditor’s inquiries. Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding: a. The successor auditor should also request that the client authorize the predecessor auditor to allow a review of the predecessor auditor's working papers. 4. Below is a snapshot of what the auditor must do before accepting an engagement for an initial audit when a predecessor auditor exists. Matters to inquire about Study with Quizlet and memorize flashcards containing terms like The audit planning process should begin with the pre-engagement activities of client _________ and continuance. B) help the successor auditor to evaluate whether to accept the engagement. (including but not limited to unpaid fees), however, may lead the predecessor to decide not to allow access to the documentation. While this firm is not a predecessor auditor under SAS no. D. c. d. Further, when more than one accountant is considering acceptance of an Oct 2, 2016 · This means a company might have to ask a predecessor to reissue its audit report. 3 days ago · Before accepting an engagement, a successor auditor is required to, with client permission, make inquiries of the predecessor auditor. The predecessor accountant may decide to reach an understanding with the successor accountant about the use of the documentation. Monday's predecessor auditor was Post, CPA, who has been notified by Monday that Post's services have been terminated. Without express consent from the client, the predecessor auditor does not have authorization to discuss confidential information.