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

Who should the predecessor auditor obtain a letter of representation from when the registration statement includes reports from two auditors?

1. The principal underwriter

2. The client’s audit committee

3. The successor independent auditor

4. The Securities and Exchange Commission

The correct answer is: The successor independent auditor

The correct answer is that the predecessor auditor should obtain a letter of representation from the successor independent auditor when the registration statement includes reports from two auditors. This practice is important because it ensures that both auditors are aligned in their understanding of the financial statements and the audit processes used. When there are multiple auditors involved in the preparation of financial statements, communication between auditors is critical. The successor auditor can provide valuable insights regarding the audit work performed and any relevant findings that may impact the predecessor's reliance on the work done by the successor. This collaboration helps to maintain the integrity of the reporting process, ensuring that all parties are informed about significant matters, which is essential for transparency and accountability. In the context of a registration statement, which is a critical document filed with regulatory bodies like the Securities and Exchange Commission, it's crucial for the predecessor auditor to have confirmation and clarity regarding any modifications, qualifications, or uncertainties that may arise from the successor independent auditor's review. This safeguards against misstatements and ensures the overall accuracy of the financial information being presented to the public and potential investors. Obtaining a letter of representation from the client’s audit committee, the principal underwriter, or the Securities and Exchange Commission, while important in their own right, does not specifically address