Before accepting an engagement to audit a new client, an auditor is required to:
A) make inquiries of the predecessor auditor after obtaining the consent of the prospective client.
B) obtain the prospective client's signature on the engagement letter.
C) prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan.
D) discuss the management representation letter with the prospective client's audit committee.

Question

Quizplus · Accepted Answer

Before accepting an engagement to audit a new client, an auditor is required to make inquiries of the predecessor auditor after obtaining the consent of the prospective client, as per the auditing standards. This helps the auditor to assess the integrity of the client, potential risks, and the adequacy of the previous audit, if any. Option B is not correct because obtaining the client’s signature on the engagement letter is a part of the acceptance process, but not mandatory before making inquiries of the predecessor auditor. Option C is incorrect because the preliminary audit plan is formulated after acceptance, not before. Option D is also incorrect because the management representation letter is obtained after acceptance, not before.

Before Accepting an Engagement to Audit a New Client, an Auditor