Question

Which of the following statements is correct with regard to the predecessor-successor communications?

a) Predecessor information is essential for successor audits to understand prior processes.
b) Predecessor data is optional for successor audits.
c) Predecessor information is only required for small-scale audits.
d) Predecessor communication is prohibited by auditing standards.

Answer 1

Predecessor information is essential for successor audits to understand prior processes.

Step-by-step explanation:

The correct statement with regard to predecessor-successor communications is:

• Predecessor information is essential for successor audits to understand prior processes.

In auditing, predecessor information provides important context, allowing auditors to understand the activities and controls in place before taking over an audit engagement. It helps auditors assess risk, identify areas for further testing, and obtain relevant insights into the organization's operations. Therefore, predecessor information is critical for successor audits.