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7. The CEO of Along Loan Company had a genuine dislike for external auditors. Almost any conflict generated a towering rage. Consequently, the company
7. The CEO of Along Loan Company had a genuine dislike for external auditors. Almost any conflict generated a towering rage. Consequently, the company changed auditors often. Well & Alley firm was recently hired to audit the 2017 financial statements. W&A succeeded the firm of Candy & Co, which had obtained the audit after Albert & Hubby had been fired. A&H audited the 2016 financial statements and rendered a report that contained an additional paragraph explaining an uncertainty about Along Loan Company's loan loss reserve. Goodbye A&H! The CEO then hired C&C to audit the 2016 financial statements, and Candy started the work, but before the audit could be completed, Candy was fired and W&A was hired to complete the audit. C&C did not issue an audit report because the audit was not finished. Required: Does the W&A firm need to initiate communications with C&C? With A&H? With both? Explain your response in terms of the purposes of communications between predecessor and successor auditors.
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