This lesson focuses on the concept of predecessor and successor auditors and the importance of communication between them when accepting new engagements. 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. Matters to inquire about include information on the integrity of management, any disagreements with management on accounting principles or auditing procedures, communications regarding fraud and illegal acts, and reporting on significant deficiencies in internal control. The goal of these inquiries is to evaluate any potential issues with the client before accepting the engagement, ensuring a smooth transition and avoiding any unexpected surprises.
Lesson: Predecessor and Successor Auditors
This lesson focuses on the concept of predecessor and successor auditors and the importance of communication between them when accepting new engagements. 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. Matters to inquire about include information on the integrity of management, any disagreements with management on accounting principles or auditing procedures, communications regarding fraud and illegal acts, and reporting on significant deficiencies in internal control. The goal of these inquiries is to evaluate any potential issues with the client before accepting the engagement, ensuring a smooth transition and avoiding any unexpected surprises.
Updated: June 22, 2023 Create an account