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

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What is a predecessor auditor's responsibility when asked to reissue a prior year's report?

  1. Consult legal counsel to find remedies.

  2. Review the previous report for necessary changes.

  3. Read the current report and obtain a letter of representation from the successor auditor.

  4. Conduct an audit of the current statements.

The correct answer is: Read the current report and obtain a letter of representation from the successor auditor.

When a predecessor auditor is asked to reissue a prior year's report, the responsibility primarily involves ensuring that the information remains relevant and accurate in the context of the current financial statements. This includes reading the current report prepared by the successor auditor and obtaining a letter of representation from that successor auditor. The letter of representation typically confirms that the successor auditor has no issues with the prior report's findings and that they have conducted their audit of the current financial statements in a manner consistent with acceptable auditing standards. The reason for this requirement is to ensure that the predecessor auditor acknowledges the current context of the previous report and that it remains reliable for the users relying on it. This process helps to maintain transparency and integrity in the auditing profession, as the predecessor auditor must be confident that the historical information aligns well with the current financial data and any ongoing audit conclusions. In contrast, reviewing the previous report for necessary changes would not align with the predecessor's responsibility, since they are not expected to update their past opinions unless a specific issue is identified through the reading of the current report. Consulting legal counsel to find remedies or conducting a new audit of the current statements goes beyond the scope of what is required for the reissuance of a prior year's report. The focus is fundamentally on ensuring consistency

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