Final answer:
If the prospective client refuses to allow the predecessor auditor to communicate with the successor auditor, the successor auditor should be cautious about accepting the client. Option a.
Step-by-step explanation:
The correct answer is True option a. If a prospective client refuses to allow the predecessor auditor to communicate with the successor auditor, it is a red flag for the successor auditor. This communication is crucial for the successor auditor to gather important information about the client's financial statements, any disagreements with the previous auditor, and any potential risks or issues.
Without this communication, the successor auditor might not have a complete understanding of the client's financial situation and may risk accepting a client with unresolved issues or potential fraud. It is considered a standard practice for the successor auditor to communicate with the predecessor auditor when transitioning to a new client.
By refusing this communication, the prospective client may be hiding important information, and the successor auditor should be cautious before accepting the client.