Question

When a CPA is approached to perform an audit for the first time, the CPA should make inquiries of the predecessor auditor. This is a necessary procedure because the predecessor may be able to provide the successor with information that will assist the successor in determining

A. Whether the predecessor's work should be utilized.
B. Whether, in the predecessor's opinion, the financial statements are materially correct.
C. Whether, in the predecessor's opinion, the company's internal controls have been satisfactory.
D. Whether the engagement should be accepted.

Answer 1

When a CPA is approached to perform an audit for the first time, it is necessary to make inquiries of the predecessor auditor to gather important information for determining whether the engagement should be accepted. The successor must form their own opinion but can gain insights into the predecessor's work.

Step-by-step explanation:

When a Certified Public Accountant (CPA) is approached to perform an audit for the first time, it is necessary to make inquiries of the predecessor auditor.

This is done to gather important information that will assist the successor in determining whether the engagement should be accepted. The inquiries help the successor understand the nature and complexity of the audit, any potential risks, and whether there are any ethical or professional concerns.

By discussing with the predecessor auditor, the successor can gain insights into the predecessor's work, including their opinion on the financial statements being materially correct and the satisfaction of the company's internal controls. However, it's important to note that the successor is responsible for forming their own opinion and cannot solely rely on the predecessor's opinion.