Question: A principal auditor decides not to refer to the audit of another CPA who audited a subsidiary of the principal auditors client. After making inquiries

A principal auditor decides not to refer to the audit of another CPA who audited a subsidiary of the principal auditor’s client. After making inquiries about the other CPA’s professional reputation and independence, the principal auditor most likely would

a. Add an explanatory paragraph to the auditor’s report indicating that the subsidiary’s financial statements are not material to the consolidated financial statements.

b. Document in the engagement letter that the principal auditor assumes no responsibility for the other CPA’s work and opinion.

c. Obtain written permission from the other CPA to omit the reference in the principal auditor’s report.

d. Contact the other CPA and review the audit programs and working papers pertaining to the subsidiary.

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