[GitRDone2017]

NINJA Question –

Here is the question:

Hill, CPA, has been retained to audit the financial statements of Monday Co. Monday’s predecessor auditor was Post, CPA, who has been notified by Monday that Post’s services have been terminated. Under these circumstances, which party should initiate the communications between Hill and Post?

A.
Hill, the successor auditor

B.
Post, the predecessor auditor

Incorrect C.
Monday’s controller or CFO

D.
The chairman of Monday’s board of directors

and here is the answer: A

so according to the textbook the successor auditor should request permission from the client to make specific inquiries of the predecessor auditor. I totally understand that so why isn’t the answer C? The predecessor auditor cannot say anything until permission has been given by the client, so if the successor auditor tries to make inquiries, they will be rejected. Doesn’t the client have to directly communicate to the predecessor auditor? Ugh!!!! These questions are sooo tricky sometimes

"Confidence is going after Moby Dick in a rowboat and taking tartar sauce with you" - Zig Ziglar
Ninja book + Ninja MCQ + Roger
AUD Oct 2016
FAR Nov 2016
BEC ?
REG?

[ruggercpa2b]

The successor auditor has to request permission to make inquiries. The client would not be the one to make the initial request because why would the client need to talk to the predecessor in regards to the new audit. The client will directly communicate to the predecessor, however, the successor has to be the one that says we need to talk to the predecessor. Now if the client says no then that is a red flag.

AUD - 73, 72 retake 7/2/2016
BEC - 8/20/2016
REG - TBD
FAR - TBD

I am so ready for this nightmare to be over. Been at this way too long.

[GitRDone2017]

I understand totally! So am I to assume that when Monday notified Post that their services were no longer needed that they also gave their permission for successor auditor? I chose “C” because the question did not state that permission had been given, so I thought that the client still had to take that step. I will copy this and take it home, at some point I will understand why “A” is the correct answer, thank you for your response

"Confidence is going after Moby Dick in a rowboat and taking tartar sauce with you" - Zig Ziglar
Ninja book + Ninja MCQ + Roger
AUD Oct 2016
FAR Nov 2016
BEC ?
REG?

[Author]

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