Auditing & Assurance Services 6th Edition by Timothy Louwers

Exercise 8

Predecessor and Prospective Auditors. The president of Allpurpose Loan Company had a genuine dislike for external auditors. Almost any conflict generated a towering rage. Consequently, the company changed auditors often.
The firm of Wells Ratley (W R), CPAs, was recently hired to audit the 2014 financial statements. W R succeeded the firm of Canby Company (C C), which had obtained the audit after Albrecht Hubbard (A H) had been fired. A H audited the 2013 financial statements and rendered a report that contained an additional paragraph explaining an uncertainty about Allpurpose Loan Company's loan loss reserve. Goodbye A H! The president then hired C C to audit the 2014 financial statements, and Chris Canby started the work, but before the audit could be completed, Canby was fired and W R was hired to complete the audit. C C did not issue an audit report because the audit was not finished.
Required:
Does the Wells Ratley firm need to initiate communications with Canby Company? With Albrecht Hubbard? With both? Explain your response in terms of the purposes of communications between predecessor and successor auditors.