The purpose of the predecessor-successor auditor communications is to help an auditor determine if a firm should engage with a new client.
Which of the following inquiries should be made of a predecessor auditor before accepting a new client engagement?
Before accepting an engagement to audit a new client, a CPA is required to obtain: The prospective client’s consent to make inquiries of the predecessor. The understanding with the client regarding a financial statement audit generally includes which of the following matters? The responsibilities of the auditor.
What is the responsibility of a successor auditor SA with respect to communicating with the predecessor auditor PA in connection with a prospective new client?
The successor auditor has no responsibility to contact the predecessor auditor. … The successor auditor should obtain permission form the prospective client to contact the predecessor auditor. c. The successor auditor should contact the predecessor auditor regardless of whether the prospective client authorizes contact.
What is a potential successor auditor's responsibility for communicating with the predecessor auditors when dealing with a prospective new client?
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.When should a successor auditor communicate with a predecessor auditor?
The successor auditor should communicate to the predecessor auditor any information that the predecessor auditor may need to consider in accordance with section 561, Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report, which sets out the procedures that an auditor should follow when the auditor …
What is predecessor auditor?
A predecessor auditor is an auditor who conducted the audit for a client in prior periods, but who no longer does so. This situation arises in any of the following circumstances: The client has notified the auditor that his or her contract will not be renewed for future audits.
Which of the following is correct regarding the communication between successor and predecessor auditors?
Which of the following is correct regarding the communication between successor and predecessor auditors? The successor auditor should request permission from the prospective client to make an inquiry of the predecessor auditor.
Which of the following Analyses appearing in a predecessor auditor's working papers is the successor auditor least likely to be interested in reviewing?
Which of the following analyses appearing in a predecessor’s working papers is the successor auditor least likely to be interested in reviewing? Analysis of income statement accounts.Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement?
It is an acceptable practice to carry out part of the audit at interim dates. Which of the following would a successor auditor ask the predecessor auditor to provide after accepting an audit engagement? Matters that may facilitate the evaluation of financial reporting consistency between the current and prior years.
How can I communicate with previous auditors?Communication with the Retiring Auditor through E-mail In the opinion of the Council, communication by a letter sent “Registered Acknowledgement due” or by hand against a written acknowledgement would in the normal course provide such evidence.”
Article first time published onWhen a prospective client refuses to permit the predecessor auditor to respond the successor auditor should?
If a prospective client refuses to permit the predecessor 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. 6.
What factors should an auditor consider prior to accepting an engagement?
Assuming independence and requisite technical abilities, the pre- acceptance evaluation of a prospective audit engagement normally focuses on three factors: 1) personal integrity of the prospective client’s management and principals, 2) presence of circumstances pointing towards unusual risks in the engagement or …
What is the primary purpose of reviewing predecessor auditor's workpapers?
The primary purpose of a workpaper review is examination scoping, in which regulators can better focus their own resources by reviewing what the auditors have already done to avoid duplication.
What if the predecessor auditor refuses to give the current auditor of a non issuer access to the documents what should the current auditor do?
if the predecessor auditor refuses to give the current auditor of a nonissuer access to the documentation, what should the current auditor do? … the independent auditor is SOLELY responsible for reporting on the FS.
Which of the following statements is true regarding an auditor's communications with a predecessor auditor prior to engagement acceptance?
Which of the following statements is true regarding an auditor’s communications with a predecessor auditor prior to engagement acceptance? Inquiries addressing specific matters are required; or example, the predecessor’s understanding for the reasons for the change in auditors.
When the prior auditor who is being replaced receives a communication from the proposed new auditor he or she should?
When the prior auditor who is being replaced receives a communication from the proposed new auditor, he or she should: Reply advising of any reasons why the proposed accountant should not accept the appointment.
Which of the following activities should be performed by the auditor at the beginning of the current audit engagement?
5. The auditor shall perform the following activities at the beginning of the current audit engagement: Performing procedures required by ISA 220, “Quality Control for Audits of Historical Financial Information,” regarding the continuance of the client relationship and the specific audit engagement.
When an auditor is planning an audit the auditor should?
When an auditor is planning an audit, the auditor should: Consider whether the extent of substantive procedures may be reduced based on the results of the internal control questionnaire. Make preliminary judgments about materiality levels for audit purposes.
Which of the following steps should an auditor perform first to determine the existence?
Which of the following steps should an auditor perform first to determine the existence of related parties? Inquire about the existence of related parties from management.
What predecessor means?
Definition of predecessor 1 : one that precedes especially : a person who has previously occupied a position or office to which another has succeeded. 2 archaic : ancestor. Synonyms & Antonyms Example Sentences Learn More About predecessor.
Which of the following matters does an auditor usually include in the engagement letter quizlet?
The terms of the engagement should be documented in an engagement letter that states the following: (1) objective and scope of the audit, (2) responsibilities of the auditor and management, (3) inherent limitations of the audit and internal control, (4) the financial reporting framework, and (5) the expected form and …
Which case would an unmodified opinion not be appropriate?
In which case would an unmodified opinion not be appropriate? A material related party transaction has occurred and has been accounted for appropriately, but it has not been adequately disclosed in the financial statements. An unmodified opinion, a qualified opinion, An adverse opinion, and disclaimer of opinion.
Which of the following audit procedures is most likely to detect lapping by the accounts receivable clerk?
One of the cashiers has been covering a personal embezzlement by lapping. Which of the following audit procedures is most likely to detect lapping by the accounts receivable clerk? cheque list on the bank reconciliation.
Which of the following inquiries should be made of a predecessor auditor before accepting a new client engagement?
Before accepting an engagement to audit a new client, a CPA is required to obtain: The prospective client’s consent to make inquiries of the predecessor. The understanding with the client regarding a financial statement audit generally includes which of the following matters? The responsibilities of the auditor.
Why does an auditor document audit evidence?
Auditing evidence is the information collected by an auditor to ascertain the accuracy and compliance of a company’s financial statements. The auditing evidence is meant to support the company’s claims made in the financial statements and their adherence to the accounting laws of their legal jurisdiction.
Which of the following audit risk components may be assessed in quantitative terms?
All 3 components of audit risk may be assessed in quantitative terms such as percentages or in nonquantitative terms that range, for example, from high to low. A Risk of failing to discover material misstatements. B Assurance provided by substantive procedures. C Risk of misapplying auditing procedures.
What is the purpose of communicating with the previous auditor?
The predecessor-successor auditor communications is the key to determining if the firm should accept the new client. This communication will allow significant information to be gathered in determining whether to proceed into an agreement or not. The success auditor must initiate the communication with the predecessor.
How can auditor resigns his appointment?
The auditor has to give his written consent to such an appointment. The company should file the notice of appointment of auditor to the Registrar of Companies, i.e. ROC (“Registrar”) within fifteen days of such an appointment. An auditor may leave the company by resigning from it.
What is NOC from previous auditor?
2 Is NOC (no objection certificate) required from previous auditor? Ans: The clause provides for communication with previous auditor where he has an opportunity to safeguard his interest and also public interest. There is no provision of NOC and it is an inherent right of client to decide its auditor and change.
What type of inquiries about a prospective client should an auditor make to third parties?
The auditor should inquire of the prospective client’s bankers and attorneys, credit agencies, and other members of the business community who may have knowledge about the integrity of the prospective client and its management.
What is the information should a successor auditor obtain during the inquiry of the predecessor auditor before accepting engagement?
The successor auditor must obtain sufficient appropriate evidential matter to afford a reasonable basis for expressing an opinion on the financial statements he or she has been engaged to audit, including evaluating the consistency of the application of accounting principles.
