Question

True or False

1. The successor auditors should obtain permission from the prospective client to contact the predecessor auditors

Answer 1

Communication between predecessors auditor and successor auditor

Section 315

This section provide guidance on communication between predecessors auditor and successor auditor when change of auditor is in process and taken place. It also provide communication when possible mis-statement are discovered in financial statement on reported by predecessors auditor.

ANSWER IS TRUE

This statement is true,the successor auditor should obtain permission from prospective client to contact the predecessor auditor.

Communication before successor auditor accept engagement

• Para 07predecessor auditor may be able to. provide information that will assist the successor auditor in determining whether to accept the engagement.

• The successor auditor should bear in mind that, among other things, the predecessor auditor and the client may have disagreed about accounting principles, auditing procedures, or similarly significant matters.

08 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.

• Except as permitted by the Rules of the Code of ProfessionalConduct, an auditor is precluded from disclosing confidential information ob-tained in the course of an engagement unless the client specifically consents

• Thus, the successor auditor should ask the prospective client to authorize the predecessor auditor to respond fully to the successor auditor's inquiries

• If a prospective client refuses to permit the predecessor auditor to respond or lim-its 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.