The audit committee of the board of directors of Unicorn Corporation asked Tish & Field, CPAs, to
Question:
The audit committee of the board of directors of Unicorn Corporation asked Tish & Field, CPAs, to audit Unicorn's financial statements for the year ended December 31, 2006. Tish & Field explained the need to make an inquiry of the predecessor auditor and requested permission to do so. Unicorn's management agreed and authorized the predecessor auditor to respond fully to Tish & Field's inquiries. After a satisfactory communication with the predecessor auditor, Tish & Field drafted an engagement letter that was mailed to the audit committee of the board of directors of Unicorn Corporation. The engagement letter clearly set forth the arrangements concerning the involvement of the pre- decessor auditor and other matters. Required:
a. What information should Tish & Field have obtained during its inquiry of the predecessor auditor prior to accepting the engagement?
b. What other matters would Tish & Field generally have included in the engagement letter? (AICPA, adapted) p-968
Step by Step Answer:
Auditing And Assurance Services A Systematic Approach
ISBN: 9780073337203
5th Edition
Authors: William Messier, Steven Glover, Douglas Prawitt