Under these circumstances, which party should initiate the communications between Hill and Post?

Last Updated on February 3, 2022 by Admin 3

Hill, CPA, has been retained to audit the financial statements of Monday Co. Monday’s predecessor auditor was Post, CPA, who has been notified by Monday that Post’s services have been terminated. Under these circumstances, which party should initiate the communications between Hill and Post?

  • Hill, the successor auditor. 
  • Post, the predecessor auditor.
  • Monday’s controller or CFO.
  • The chairman of Monday’s board of directors.
Explanation: 
Choice “A” is correct. The initiative to communicate with the predecessor auditor rests with the successor auditor. Note, however, that the successor auditor must first receive permission from the client.
Choice “B” is incorrect. The predecessor auditor should respond promptly and fully to reasonable inquiries. However, the predecessor is not responsible for initiating communications.
Choice “C” is incorrect. The prospective client should authorize the predecessor to respond fully to the successor’s inquiries. However, the client is not responsible for initiating communications.
Choice “D” is incorrect. The prospective client should authorize the predecessor to respond fully to the successor’s inquiries. However, the client is not responsible for initiating communications.
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