Which Statement Is Correct Relating to a Potential Successor Auditor's

question 15

Multiple Choice

Which statement is correct relating to a potential successor auditor's responsibility for communicating with the predecessor auditors in connection with a prospective new audit client?

• A) The successor auditors have no responsibility to contact the predecessor auditors.
• B) The successor auditors should obtain permission from the prospective client to contact the predecessor auditors.
• C) The successor auditors should contact the predecessors regardless of whether the prospective client authorizes contact.
• D) The successor auditors need not contact the predecessors if the successors are aware of all available relevant facts.

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Definitions:

Recording

The act of documenting financial transactions in the books of accounts as part of the accounting process.

Transactions

Financial events that affect the assets, liabilities, or equity of a company, recorded in its accounting system.

Accounting

The systematic process of recording, measuring, and communicating information about financial transactions.

Risk

The exposure to uncertainty or potential financial loss in decision-making and investment.