Question

When approached to perform an audit first auditor should make inquiries of the predecessor auditor. This is a necessary procedure because the predecessor auditor may be able to provide the successor with information that will assist the successor in determining whether ______________.

• A. the engagement should be accepted
• B. in the predecessor's opinion internal control of the company has been satisfactory
• C. the predecessor's work should be used
• D. the company follows the policy of rating its auditors

Answer 1

The correct option is B in the predecessor's opinion internal control of the company has been satisfactory

The new auditor should communicate with the predecessor auditor, it is a professional conduct, as per the companies act.

This might also help the new auditor to obtain certain information & critical areas to be more alert about and also the predecessor auditor's opinion on internal controls, since that would help the new auditor to apply his audit procedures and tests accordingly.