If a company refuses permission to contact its previous audit firm, what should the new auditor do?
A)Consider the implications of that refusal when deciding whether to accept the engagement.
B)Contact potential third parties to gain information about the client firm.
C)Review newspaper and magazine articles about the client.
D)Do a background check on the CEO of the company.

Question

Quizplus · Accepted Answer

If a company refuses permission to contact its previous audit firm, the new auditor should consider the implications of that refusal when deciding whether to accept the engagement. This refusal may indicate a problem or disagreement with the previous auditor, or it may be a red flag that the client is trying to hide something. The auditor should carefully evaluate the risks associated with accepting the engagement and may need to gather additional information before making a decision. The other options are not appropriate or effective ways to address this issue.

If a Company Refuses Permission to Contact Its Previous Audit