Question: Read the case, then answer the questions that follow BACKGROUND: Audit standards require thaf successor auditors communicate with predecessor auditors prior to accepting an engagement.

 Read the case, then answer the questions that follow BACKGROUND: Audit

Read the case, then answer the questions that follow BACKGROUND: Audit standards require thaf successor auditors communicate with predecessor auditors prior to accepting an engagement. Predecessor auditors, however, cannot share confidential client information without the permission of the client. Once permission is granted, communication can begin and includes conversations about the client to help the successor auditor determine if client acceptance appears appropriate. For example, conversations will include discussion about management integrity, any disagreements with management, communication with those charged with governance, and the reason for the auditor change. Smith Jones CPA was the predecessor auditor for Awesome Adventures Inc Jones was told that the firm was terminated and Awesome Adventures was to retain Rich Fortune CPA. Rich Fortune contacted Smith or conversation. Smith Jones indicated that Awesome Jones in order to have a predecessor-success Adventures was a long time client of the firm and that the dispute which led to the termination of its services significantly revolved around audit fees. Jones indicated that management put unusual time deadlines on the CPAs, and they sometimes felt rushed to complete the audit. 1. What step did Rich Fortune fail to perform? 2. Rich Fortune appears to have asked Smith Jones about management integrity, disagreements with management, and the reason for the auditor change What did Rich Fortune fail to ask Smith Jones? 3. What should Rich Fortune do with the information about the unnecessary time pressure

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!