Communication with previous auditor

Hi Mr. Veeresh,

Im giving answer on basis of my knowledge of Clause 8 of Part I to First Schedule to CA Act, so, other expert friends, kindly rectify me if Im wrong.

From ur query it seems that previous auditor has not expressed qualified opinion. Communication of their objections are limited in purpose i.e. for reply to you only.

In this case, you CAN accept the audit. If previous auditor has qualified his report then you CANNOT.

[For info only - If previous auditor has qualified his report and incoming auditor think that previous auditor is justified then he cannot accept the audit. But incoming auditor thinks that attitude of previous auditor is not justified and proper then he can accept the audit.]

I don't think that the basis of accepting the audit assignment should be only related to qualified opinion in the AR by the previous auditor.

 As said by Veersh, that the client had asked to backdate teh AR, for wihc the prevous auditor had refused, so this reason whould also be considered while accepting the audit.

As a whole the incoming auditor should discuss in detail with teh previous auditor,  all the facts that led to the resignation by the previous auditor & then only after that the incoming auditor should be ready to accept teh audit assignment.

The thinking of the auditor should not be subject to the directions as given by the client.  If the auditor does so. then the 'Auditor's Independence' would be impaired. 

Hello Mr. Giridhar,

As per aforesaid clause 8, there are only three conditions in case of which incoming auditor cannot accept the audit

viz. qualification by previous auditor (let’s say modification in audit opinion – as per new SA)

and non payment of undisputed audit fees

and non compliance with Sec. 224, 225 of Co. Act.

Besides this there are no any reasons for which incoming auditor should refuse the audit.

As you have suggested that incoming auditor should discuss these facts in details with previous auditor - as per my knowledge, previous auditor is required to communicate only the thing whether he has any objection or not. If he disclose any confidential info of client, he will be punishable for professional misconduct.

In my opinion, if previous auditor refused to sign back dated but has not qualified his report, then incoming auditor should not have any problem in accepting the audit.

My freind Yogesh.  Try to be practical.  Dont just follow what teh Institute has given in the module.  The institute's says that the auditor should preserve it's auditor's independence.  So the incoming auditor in order to preserve its independence has to consider all the facts that are necessary to conduct the audit.  If after accepting the audit the auditor feels that he should not have accepted the appointment then it would not be a professional practice.