Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

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What should a successor auditor do when drafting the current year's report after a predecessor auditor expressed a qualified opinion?

  1. Not name the predecessor auditor

  2. Indicate the type of report and substantive reasons for the qualification

  3. Only indicate the type of report issued by the predecessor

  4. Indicate the predecessor auditor's name and omit the qualification reasons

The correct answer is: Indicate the type of report and substantive reasons for the qualification

When a successor auditor is drafting their report after the predecessor auditor has issued a qualified opinion, it is essential to follow the guidelines established by auditing standards regarding the communication of the predecessor's opinion and the reasons behind it. The correct action for the successor auditor is to indicate the type of report issued by the predecessor and to provide substantive reasons for the qualification. This approach is necessary for several reasons. Firstly, it ensures transparency and clarity for the users of the financial statements, as it highlights the issues that led to a qualified opinion and preserves the integrity of the audit process. By explicitly stating the type of report issued and the reasons for the qualification, the successor auditor helps users understand the context and implications of the previous audit, which can significantly impact their assessment of the current year's financial statements. Additionally, this practice aligns with professional standards which advocate for clear communication regarding previous audits and qualifications to maintain trust in the auditing profession and to provide stakeholders with relevant information. This transparency assists in informing users about any potential issues that could affect their decision-making process. In contrast, not naming the predecessor auditor would obscure essential information, and simply indicating the type of report or omitting the qualification would fail to provide a complete picture of the audit history, leaving users uninformed about significant

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