Successor auditors need to communicate with predecessor

Successor auditors need to communicate with predecessor. 84 provides guidance on predecessor-successor communications when a change of auditors is in process or has taken place. 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. 06-60 What is a potential successor auditor's 24 What is a potential successor auditor's responsibility for communicating with the predecessor auditors when dealing with a prospective new client? points Skipped Multiple Choice eBook References The successor auditors have no responsibility to contact the predecessor auditors. 03 Aug 6, 2024 · Study with Quizlet and memorize flashcards containing terms like Which of the following is correct regarding the communication between successor and predecessor auditors? a. Inquiry of the predecessor auditor is a necessary procedure A successor auditor request permission to communicate with the predecessor auditor in order to review high risk accounts for a new audit client which would impact the auditor's ability to design audit tests. Audit standards require successor auditors to attempt communication with the predecessor auditors. Successor auditors need to communicate with predecessor auditors (Blank) accepting the engagement. Communication between predecessor and successor auditors aids in evaluating the 5. ' You can avoid many headaches. Study with Quizlet and memorize flashcards containing terms like Successor auditors seek information from predecessor auditors on communication with the client and those charged with governance regarding what?, Increases in materiality result in __________ in the scope of audit procedures, Many firms have developed one of these that uses a combination of financial and nonfinancial performance 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. Predecessor auditors will help successor auditors to determine whether or not to accept an engagement Part 1 - Comprehension Case (requires manual grading) Read the case, then answer the questions that follow. The purpose of the requirement of having communication between the predecessor and successor auditors is to help the predecessor Mar 2, 2015 · The successor accountant must request the client to communicate with the predecessor when the successor believes that the financial statements reported on by the predecessor are materially misstated. -must obtain the client's consent before discussing confidential information with the predecessor auditor-is granted permission to contact the predecessor auditor by default-is prohibited from accepting the engagement if communication with the predecessor auditor is denied by management D) The predecessor auditor of a public company does not need permission from the client before communicating with the successor auditor. 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: Study with Quizlet and memorize flashcards containing terms like Which statement is correct relating to a potential successor auditor's responsibility for communicating with the predecessor auditors in connection with a prospective new audit client? A. guidance on communications between a predecessor and successor accountant when the successor accountant decides to communicate with the predecessor accountant regarding acceptance of an engagement to compile or review the financial statements of a nonissuer. The successor may choose not to attempt any communication with the predecessor auditor. Predecessor auditors will help successor auditors to determine whether or not to accept an engagement. the predecessor auditor of a public company doesn't need permission from the client before 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. Therefore, the required communications also are applicable in this situation. The burden of initiating the communication rests with the predecessor auditor. (Blank) must ask management to authorize the predecessor auditors to discuss confidential information. edu Question: Successor auditors need to communicate with predecessor auditors accepting the engagement O subsequent to O immediately following concurrent with O before O after Show transcribed image text CONCEPT REVIEW: Audit standards require successor auditors to attempt communication with the predecessor auditors. Mar 4, 2024 · The successor auditor will need to review the working papers prepared by the predecessor auditor as part of its planning for the current-year audit. olemiss. Part 2 - Concept Check 1. , If predecessor auditors refuse communication, successor auditors _____ accept the engagement. The prospective client's refusal to permit this will bear directly on Hawkins' decision concerning the: A) adequacy of the preplanned audit program. The predecessor auditor must receive their former client's permission prior to divulging information to the successor auditor d. O The NEW YORK (February 25, 2021) – The American Institute of CPAs (AICPA) Auditing Standards Board (ASB) has issued the exposure draft (ED) Proposed Statement on Auditing Standards (SAS) Inquiries of the Predecessor Auditor Regarding Fraud and Noncompliance With Laws and Regulations (NOCLAR) to amend SAS No. fore must ask management to authorize the predecessor auditors to discuss confidential information. B) ability to establish consistency Sep 27, 2022 · A successor auditor should always make inquiries of the predecessor auditor before accepting an audit engagement. The successor auditor should contact the predecessor auditor prior to proposing an audit engagement. GAAS requirements more in line with PCAOB standards (specifically AS 2610– , Initial Audits Communications Between Predecessor and Successor Auditors). Whether such a review provides 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 Management authorization of communication between successor and predecessor auditors In accordance with extant AU -C section 210, prior to accepting an initial or a reaudit engagement, a prospective auditor is required to request management to authorize thepredecessor auditor to. Question: Successor auditors need to communicate with predecessor auditors _____ accepting the engagement. The successor auditors should know the reason why the predecessor auditor decided to terminate the engagement and give significant information related to the company that is being audited. The successor auditors need not contact the predecessors The predecessor must always respond fully to all inquiries made by the successor auditor. must ask management to authorize the predecessor auditors to discuss confidential information. A predecessor auditor is required to attempt to initiate communication with the successor auditor: Prior to the successor's Acceptance of the Engagement/ Subsequent to the successor's acceptance of the engagement. A2 Twopredecessorauditorsmayexist:theauditorwhoreportedonthe A. 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 subsequently discovers Aug 16, 2022 · The predecessor auditor may be a repository of information that may be important to a potential successor auditor. The successor auditor must obtain the permission of the client before discussing audit In this lesson, the concept of predecessor auditors and successor auditors is explained in the context of an audit engagement. ” Further, paragraph . 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. The guidance provided concerns only the situation in which one accountant succeeds another in a compilation or review engagement. , If the predecessor auditors refuse communication, successor auditors _____ accept the engagement. c One of the results of these efforts by the ASB is the issuance of SAS No. Successor auditors need to communicate with predecessor auditors 2 accepting the engagement. The predecessors must ask the client for permission before sharing information with the successor auditors. The new audit client's refusal to allow this communication to occur would impact Rodgers decision concerning: so, whether the predecessor auditor’s opinion was modified. If predecessor auditors refuse communication, successor auditors 4. Additionally, the successor auditor Study with Quizlet and memorize flashcards containing terms like 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, Accepting the engagement, Form 8k and more. 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 burden of initiating the communication rests with the successor auditor. As a predecessor auditor, we should supply “reasonable” information to the successor auditor concerning the client. a. The predecessor auditor may choose to provide a This lesson focuses on the concept of predecessor and successor auditors and the importance of communication between them when accepting new engagements. Executive Summary “SAS No. We believe that strong client acceptance Study with Quizlet and memorize flashcards containing terms like Successor auditors need to communicate with predecessor auditors _____ accepting the engagement. 84, Communications Between Predecessor and Successor Auditors, supersedes SAS No. COMMUNICATIONS BETWEEN PREDECESSOR AND SUCCESSOR AUDITORS. 122, as amended, section 210, Terms of Engagement. It is considered a standard practice for the successor auditor to communicate with the predecessor auditor when transitioning to a new client. A4. The predecessors must have permission from the previous client before sharing information with the successor auditors. Related AccountingTools Study with Quizlet and memorize flashcards containing terms like Successor auditors need to communicate with predecessor auditors _____ accepting the engagement. Jun 7, 2021 · not meaningfully change the requirements for communications between predecessor and successor auditors that already exist. If predecessor auditors refuse communication, successor auditors accept the engagement. If predecessor auditors refuse communication, succe Study with Quizlet and memorize flashcards containing terms like What is the responsibility of a successor auditor with respect to communicating with the predecessor auditor in connection with a prospective new audit client?, With respect to planning an audit, which of the following statements is always true?, In developing an overall audit strategy, an auditor should consider and more. The term "successor auditor" refers to an auditor who has accepted an engagement or an The communication between the successor auditors and predecessor auditors should be done prior to accepting the engagement. 01 Question—Section 400, Communications Between Predecessor and Successor Accountants, provides guidance on communication between a successor accountant and a predecessor accountant. Jul 12, 2022 · Once SAS No. Engaging with a successor auditor often requires certain protocols to be followed: Communication with Predecessor Auditor: Before accepting the audit engagement, professional standards generally require the successor auditor to communicate with the OAG Guidance. 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 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. If so, the successor auditor will need the client’s permission to discuss matters with the predecessor auditor. Successor auditors: 3. 84. Study with Quizlet and memorize flashcards containing terms like A written understanding between the auditor and the entity concerning the auditor's responsibility for fraud is usually set forth in a(n):, During the initial planning phase of an audit, a CPA most likely would:, Successor auditors need to communicate with predecessor auditors __________ accepting the engagement. org Accordingly, if the successor accountant decides to communicate with the predecessor, the successor accoun-tant should request the client to (a) permit the successor accountant to make inquiries of the predecessor accountant and (b) authorize the predecessor ac-countant to respond fully to those inquiries. auditors 3. 7, and among other things, (a) revises the definitions of predecessor and successor auditors, (b) adds additional inquiries that the successor must make of the predecessor before an engagement can be accepted, (c) clarifies Nov 28, 2023 · Without this communication, the successor auditor might not have a complete understanding of the client's financial situation and may risk accepting a client with unresolved issues or potential fraud. S. _____ must ask management to authorize the predecessor auditors to discuss confidential information. Even so, audit standards require that you (at least try to) contact them. The importance of communicating with the predecessor auditors before accepting an engagement is emphasized, as it helps in gathering vital information to assess the reputability and accuracy of previous audited financial statements. b. , _____ must ask management to authorize the predecessor auditors to discuss confidential information. 147 is in effect, any AICPA member who's considering accepting an auditing engagement will be required to get authorization from a predecessor auditor's management to disclose any identified or suspected fraud or noncompliance with laws and regulations, also known as NOCLAR. 7 of the same name. BACKGROUND Audit standards require that successor auditors communicate with predecessor auditors prior to accepting an engagement. and more. Agreeing to an auditing engagement is a big decision, and auditors must do their homework before accepting a new client. Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's understanding as to the reasons for the change of auditors predecessor auditor should ordinarily permit the successor auditor to review working papers, including documentation of planning, internal control, audit results, and other matters of continuing accounting and auditing significance, See full list on pcaobus. The successor must discuss with the predecessor matters bearing on the engagement prior to accepting the engagement. the predecessor should communicate with the successor only if the client is public D. 05). the burden of initiating the communication rests with the predecessor B. accept the The successor auditor should communicate to the predecessor auditor any information that the predecessor auditor may need to consider in accordance with AS 2905, 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 subsequently discovers facts The successor auditor takes over the audit responsibilities from the predecessor auditor. This must be done in order to gain a sufficient understanding of the client’s operations and processes. Successor auditors need to communicate with predecessor auditors accepting the engagement. NASBA firmly believes that it is in the public interest to allow the predecessor auditor to freely discuss matters involving NOCLAR with the successor auditor. Aug 31, 2016 · 302. Communicating with a predecessor auditor can be trying. c. B. Smith, CPA has requested permission to communicate with the predecessor auditor in order to review certain workpapers for high risk accounts for a new audit client. Matters to inquire about A. 84, Communications Between Predecessor and Successor Auditors, in October 1997, that supersedes SAS No. Communication between predecessor and successor auditors aids in evaluating Successor auditors need to communicate with predecessor auditors _____ accepting the engagement. The successor auditors have no responsibility to contact the predecessor auditors. Like its predecessor, SAS No. The term "predecessor auditor" refers to an auditor who has resigned or who has been notified that his services have been terminated. If the predecessor limits his or her response because of unusual circumstances, such as litigation, that should be disclosed. An auditor who is considering accepting a reaudit engagement is considered to be a successor auditor and the previous auditor is a predecessor auditor under SAS no. accepting the engagement. If predecessor auditors refuse communication, successor auditors _____ accept the engagement. The successor should specifically inquire about the predecessor's: Understanding as to the reasons for the change of auditors. Opening Balances —Initial Audit Engagements 621 Definitions Predecessor Auditor (Ref: par. . Option A: Yes/Yes Option B: Yes/No Option C: No/Yes Option D: No/No TB MC Qu. C) help the client by facilitating the change of auditors 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. B) help the successor auditor to evaluate whether to accept the engagement. B B. Successor auditors need to communicate with predecessor auditors _____ accepting the engagement. 4. In this article, I tell you when to make contact, what inquiries to make, what responses you Feb 25, 2021 · strengthen auditor communication, to assist auditors in making informed decisions during acceptance of new clients, and to bring U. 3 If the prospective client refuses to p SAS No. May 15, 2024 · PCAOB standards at AS 2610 require the successor auditor to communicate with and make a variety of inquiries with the predecessor auditor prior to accepting the engagement and that acceptance cannot be final until the communications received from the predecessor have been evaluated. before: 2. Study with Quizlet and memorize flashcards containing terms like A successor auditor is required to attempt communication with the predecessor auditor prior to:, An abnormal fluctuation in gross profit that might suggest the need for extended audit procedures for sales and inventories would most likely be identified in the risk assessment phase of the audit by the use of:, Preliminary Study with Quizlet and memorize flashcards containing terms like Hawkins requested permission to communicate with the predecessor auditor and review certain portions of the predecessor auditor's working papers. Request for Specific Comment 1: egrove. the predecessor's response can be limited to stating that no info will be provided C. A B) The predecessor’s response can be limited to stating that no information will be provided. When a successor auditor is offered an auditing engagement, the successor auditor _____. The successor and predecessor auditors should communicate with each other in writing regarding potential problems. Therefore, auditing standards require that before a new auditor can accept the engagement, they must inquire about certain matters of the predecessor auditor. 7, and establishes new standards for the auditor in documenting communications between the successor and predecessor auditors. 3. A successor auditor request permission to communicate with the predecessor auditor in order to review high risk accounts for a new audit client which would impact the auditor's ability to design audit tests. Shopping for accounting principles is by Sarbanes-Oxley. 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. imkcccka wkiip mnes djl trik inana gmhtmhp tan wxcrr woorpz