Predecessor auditor. Predecessor Auditor Rep. Letter 2019-01-13

Predecessor auditor — AccountingTools

Unfortunately, however, the standards provide little or no application guidance. Thus, the successor auditor should ask the prospective client to authorize the predecessor auditor to respond fully to the successor auditor's inquiries. However, an auditor may make a proposal on an engagement before initiating communications. In the case of a reaudit, this includes reading the prior financial statements, speaking with company management and ensuring it will be able to obtain the necessary audit evidence. The predecessor auditor may wish to request a consent and acknowledgment letter from the client to document this authorization in an effort to reduce misunderstandings about the scope of the communications being authorized. The successor also should consider consulting an attorney to determine the appropriate course of action. For that purpose only, we will provide you access to our working papers that relate to that objective.

AUDITING CHAPTER 3 Flashcards

Express an opinion only on the current year's financial statements and make no reference to the prior year's statements. Our invoices will be payable upon presentation. For audits of fiscal years beginning before December 15, 2010,. However, the reauditor and the predecessor may have different ways of evaluating the effect of these uncorrected misstatements. However, should the predecessor auditor decide, due to unusual circumstances such as impending, threatened, or potential litigation; disciplinary proceedings; or other unusual circumstances, not to respond fully to the inquiries, the predecessor auditor should clearly state that the response is limited. The successor auditor performing the reaudit should, if material, observe or perform some physical counts of inventory at a date subsequent to the period of the reaudit, in connection with a current audit or otherwise, and apply appropriate tests of intervening transactions.

AU Section 315

The 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, such as the working paper analysis of balance sheet accounts, and those relating to contingencies. Revised, April 2007, to re? Once rather unusual, reaudits have become increasingly common as companies switching auditors have voluntarily elected such arrangements. This includes analytical procedures and a review of post-balance-sheet transactions. Was Gray correct to use the specialists provided by the client or someone else related to the client? Communications Before Successor Auditor Accepts Engagement. We rendered a report on those financial statements and have not performed any audit procedures subsequent to the audit report date.

A predecessor auditor who has been asked to reissue his or her report

Hey guys — This forum is great. The discovery of the possible misstatement would be a result of the current years audit engagement and not a result of the review of the predecessor auditors working papers. If the successor auditor receives a limited response, its implications should be considered in deciding whether to accept the engagement. Effective with respect to acceptance of an engagement after March 31, 1998, unless otherwise indicated. Please confirm your agreement with the foregoing by signing and dating a copy of this letter and returning it to us.

The Once and Future Auditors

Disagreements with management as to accounting principles, auditing procedures, or other similarly signi? Read prospective client copies of any correspondence with the predecessor auditor or regulators. You agree to advise us promptly and provide us a copy of any subpoena, summons, or other court order for access to your working papers that include copies of our working papers or information otherwise derived therefrom. Furthermore, the predecessor auditor is not a specialist as de? Obtain an updated management representation letter and compare it to that obtained during the prior period audit. The auditor may wish to advise the prospective client for example, in a proposal that acceptance cannot be final until the communications have been evaluated. Our use of professional judgment and the assessment of audit risk nd materiality for the purpose of our audit mean that matters may have existed that would have been assessed differently by you. This process can give rise to several complications. You agree to subject any such copies or information otherwise derived from our working papers to your normal policy for retention of working papers and protection of con? Several circumstances commonly lead to a reaudit.

Communication Between Predecessor and Successor Accountants

In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's. Acceptable confirmations include cash, related party, accounts receivable and debt. Lancaster, This letter explains how I intend to carry out the audit process for Apollo Shoes, Inc. As in all audits, if the successor is unable to obtain competent evidential matter in order to express an opinion, he or she should qualify or disclaim an opinion. An auditor considers illegal acts from the perspective of the reliability of management's representations rather than their relation to audit objectives derived from financial statement assertions.

Predecessor auditor — AccountingTools

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 facts that may have affected the audited financial statements previously reported on. I always knew the answer was successor auditor and management, but that wasn't one of the answers to choose from. To maximize efficiency and effectiveness, the firm should coordinate reaudit planning with planning for the current audit. Please seek appropriate professional advice for tax-related matters. And what's up with old work papers: is the new auditor even allowed to look at those? After risk assessment is complete, I will plan the audit and schedule a meeting with management of Apollo Shoes, Inc. If a prospective client refuses to permit the predecessor auditor to respond or limits 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. 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.

A predecessor auditor who has been asked to reissue his or her report

The successor auditor may wish to consider other reasonable inquiries. The reauditor may consider confirmation responses the predecessor obtained—provided it can get copies. The successor should comply with the agreement not to comment orally or in writing to anyone, including the client, in this area. Nick Robertson Chief Executive 2. Corporate executives and boards of directors view reaudits in conjunction with an auditor change as a way to prove due diligence and satisfy the additional responsibilities imposed on them by the Sarbanes-Oxley Act of 2002.