Communication Between Predecessor And Successor Auditor

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Communication between Predecessor and Successor Auditor

Communication between Predecessor and Successor Auditor


This section provides guidance on communications between the auditor predecessor and successor in the process when a change in auditors or is already been made. It also provides guidance on communication to make when possible misstatements are discovered in the states financial auditor examined by a predecessor (Mark & Carcello, 2006).

An auditor may be called to replace or substitute for a colleague in conducting a review of financial statements, communication with the auditor who is to succeed or replace, constitutes ethical behavior and strengthen professional relationships. Based on the above it is noteworthy that the successor auditor generally should initiate communications. Communication may be oral or written, but the predecessor and successor auditor must keep with the confidentiality required by the case, the information that crosses each other. This obligation is necessary even if the successor auditor accepts the job or not.

Discussion Analysis

The communication between predecessor and successor auditor is a procedure made necessary by the successor auditor questions, given that they may provide the same information to help you in deciding whether to accept the job. The successor auditor should keep in mind that among other things, the predecessor auditor and the client may have had disagreements about accounting principles, auditing procedures or important issues.

For purposes of this Section, the term "predecessor auditor" refers to a auditor (a) has issued an audit report on the financial statements more Recent (1) or was hired but did not complete an audit of the financial (2) and (b) has resigned, has refused to accept being rehired, or has been notified that their services have been terminated or that could be completed. The term "successor auditor" means an auditor who is considering accepting a work to perform an audit of financial statements but has not been reported with the predecessor auditor in accordance with the provisions of paragraphs 7 to 10, as also an auditor who has accepted such work.

Before accepting the offer of a new client, a large part of the audit firm collects information about the company to determine whether it is acceptable offer. If possible, it is necessary to evaluate the prospective client's reputation in business circles, the strength of its financial position and its relationship with the previous auditor. In cases where a future client audit services previously enjoyed another auditing firm, a new auditor (successor), as required by 8A87 (AT1-315), should get in touch with his predecessor (Michael, 2006). The purpose of this requirement is to help the successor to determine whether he could accept the proposal of the client. In the course of communication with the previous auditor of his successor may find, for example, that the customer is not completely honest or constantly come into conflict over the principles of accounting, auditing procedures, or the size of the fee.

The proposal to make contact with the predecessor's successor should come from. Due to the fact that the "Code of Professional Ethics" requires confidentiality, the prospective ...
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