A successor auditor most likely would make specific inquiries of the predecessor auditor regarding

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by asked Nov 1, 2021 12 views

A successor auditor most likely would make
specific inquiries of the predecessor auditor
regarding
a. Specialized accounting principles of the
client's industry.
b. Disagreements with management as
to auditing procedures.
c. The competency of the client's internal
audit staff.
d. The uncertainty inherent in applying
sampling procedures.

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Last Updated on February 3, 2022 by Admin 3

  • AUD CPA : All Parts

  • Specialized accounting principles of the client’s industry.
  • The competency of the client’s internal audit staff.
  • The uncertainty inherent in applying sampling procedures.
  • Disagreements with management as to auditing procedures. 

Explanation:​
Choice “D” is correct. Inquiries should include specific questions regarding, among other things, facts that might bear on the integrity of management; disagreements with management as to accounting principles, auditing procedures, or other similarly significant matters; communications with those charged with governance regarding fraud, illegal acts, and matters relating to internal control; and the predecessor’s understanding as to the reasons for the change of auditors.
Choice “A” is incorrect. Specialized industry accounting principles might be discussed; however, the successor would be more likely to inquire about items specific to the client.
Choice “B” is incorrect. The competency of the client’s internal audit staff might be discussed; however, inquiries of the predecessor auditor regarding the staff are not required.
Choice “C” is incorrect. The uncertainty in applying sampling procedures is not something that is typically discussed with the predecessor auditor.

  • AUD CPA : All Parts

What inquiries should the successor auditor make of the predecessor auditor?

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.

Which of the following statements is true regarding communications between predecessor and successor auditors?

Which of the following statements is true regarding communications between predecessor and successor auditors? The predecessor's response can be limited to stating that no information will be provided. The purpose of an engagement letter is to: document the terms of the engagement.

What is the responsibility of a successor auditor to communicate with the predecessor auditor?

The successor auditor has no responsibility to contact the predecessor auditor.

What information should an incoming auditor obtain during the inquiry of the predecessor auditor prior to acceptance of the audit?

i) Information about integrity of management. ii) Disagreement with management concerning auditing procedures. iii) Review of internal control system.

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