An auditor most likely would make specific inquiries of the predecessor auditor regarding

Before accepting an audit engagement, a successor auditor should make specific inquiries of the predecessor auditor regarding the predecessor's:

a. opinion of any subsequent events occuring since the predecessor's audit report was issued

b. understanding as to the reasons for the change of auditors

c. awarness of the consistency in the application of GAAP between periods

d. evaluation of all matters of continuing accounting significance

Definition
Understanding as to the reasons for the change of auditorsTerm

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

a. specialized accounting principles of the client's industry

b. the competency of the client's internal audit staff

c. the uncertainty inherent in applying sampling procedures

d. disagreements with management as to auditing procedures

Definition
Disagreements with management as to auditing proceduresTerm

Before accepting an engagement to audit a new client, a CPA is required to obtain:

a. an understanding  of the prospective client's industry and business

b. a management representation letter

c. the uncertainty inherent in applying sampling procedures

d. the prospective client's consent to make inquiries of the predecessor auditor, if any

Definition
The prospective client's consent to make inquiries of the predecessor auditor, if anyTerm

Which of the following statements would appear in an auditor's engagement letter?

a. fees for our services are based on our regular per diem rates, plus travel and other out-of pocket expenses

b during the course of our audit we may observe opportunities for economy in, or improved controls over, your operations

c. our engagement is subject to the risk that material errors or irregularities, including fraud and defalcastions, if they exist, will not be dected

d. after performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagement.

A successor auditor most likely would make specific inquiries of the predecessor auditor regarding:
A. Specialized accounting principles of the client’s industry.
B. The competency of the client’s internal audit staff.
C. The uncertainty inherent in applying sampling procedures.
D. Disagreements with management as to auditing procedures.

Correct Answer: D
Explanation/Reference:
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.

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