ICAEW ARF · Chapter 2 · Question 8 of 8
A prospective auditor receives a reply from the existing auditor, with the client's permission, saying that the directors have previously given misleading information to the auditors. What should the prospective auditor do?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Consider this information carefully when deciding whether to accept the appointment, as it raises doubts about management integrity
Explanation
Professional clearance exists so that the prospective auditor learns of matters relevant to accepting the appointment. Concerns about management integrity increase the risk of the audit significantly and may lead the firm to decline. The information should not be dismissed, nor passed to the directors, and misleading the auditors is not by itself a matter for police reporting.
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