a) State the reasons why an auditor might not be appointed. b) Identify the matters that a new auditor would discuss with the management of a...

a) State the reasons why an auditor might not be appointed.
b) Identify the matters that a new auditor would discuss with the management of a client on
their first meeting.

a) Reasons why auditor may not be reappointed
- If the auditor has sent the letter of resignation dropping his interest to be appointed as the
auditor in next financial year
- Where the management does feels that the cost of the auditor has gone so high that they
feel that such cost would be unjustified.
- Where the auditor is not qualified i.e. not independent to continue acting as the client
auditor.
- Where the auditor is not competent to perform the work of the client as-expected
- Where the auditor has disagreed with the directors because he has issued a qualified
report.

b) Matters that a new auditor would discuss with the management of a client on their first
meeting
- To discuss and agree on the scope of work and responsibility for the audit
- To find out the duties and responsibility of the senior staff
- Discussions regarding the nature and effectiveness of the internal control system
instituted by the management
- To discuss and agree on the timing of the field visits
- To discuss and make resolutions on any additional services that may be provided by the
firm.
- To negotiate for the audit fee.

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Kavungya answered the question on May 14, 2019 at 12:12

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