Before accepting an engagement to audit a new entity,an auditor is required to
A) Make inquiries of the predecessor auditor.
B) Tell the company whether or not the auditor is willing to issue a "clean" opinion.
C) Prepare a memorandum setting forth the staffing requirements and documenting the preliminary audit plan.
D) Become a member of the entity's board of directors.

Question

Quizplus · Accepted Answer

Before starting the audit, the auditor should inquire with the predecessor auditor about the reasons for the change of auditors, any difficulties encountered during the previous audit, and whether there were any disagreements on accounting principles or audit procedures. This helps the auditor to understand the entity's business and industry, identify potential risks, and plan the audit accordingly. The other choices are incorrect as they do not align with the auditor's responsibilities before accepting an engagement.

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