Blue Fire Limited ("BFL") is a jewellery retailer in Hong Kong operates 50 retail outlets. In recent years, BFL has experienced rapid growth and expanded its retail network from physical outlets to online platform. BFL has an initial public offering ("IPO") plan to list on the Hong Kong Stock Exchange in 2022. Therefore, they plan to switch its auditor to a more experienced CPA firm with an IPO support service provided. 

Kenny Tong is an audit partner of Beta CPAs & Co (Beta). Joan Wong is the Chief Financial Officer of BFL. They are high school friends and have known each other for more than 20 years. In October 2020, BFL approached Beta and proposed to appoint the firm as the new auditor of BFL's financial statements for the year ended 31 December 2020. Beta is considering whether to accept the nomination.

Required: (a) In the proposed change of auditor appointment, Beta should communicate with the existing auditor of BFL to request for "professional clearance". No reply has been received from the existing auditor yet. Suggest follow up actions that should be carried out by Beta on this matter.

(b) Other than the professional clearance mentioned above, suggest other relevant consideration factors and procedures that should be considered by Beta before accepting the nomination as BFL's auditor.

Answer rating: 100% (QA)

a In the proposed change of auditor appointment Beta should follow up with the existing auditor of B... View the full answer