AU Section 315
Communications Between Predecessor and Successor Auditors
(Supersedes SAS No. 7.) Source: SAS No. 84; SAS No. 93. Effective with respect to acceptance of an engagement after March 31, 1998, unless otherwise indicated.
.01 This section provides guidance on communications between predecessor and successor auditors when a change of auditors is in process or has taken place. It also provides communications guidance when possible misstatements are discovered in ﬁnancial statements reported on by a predecessor auditor. This section applies whenever an independent auditor is considering accepting an engagement to audit or reaudit (see paragraph .14 of this section) ﬁnancial statements in accordance with generally accepted auditing standards, and after such auditor has been appointed to perform such an engagement. .02 For the purposes of this section, the term predecessor auditor refers to an auditor who (a) has reported on the most recent audited ﬁnancial statements1 or was engaged to perform but did not complete an audit of the ﬁnancial statements2 and (b) has resigned, declined to stand for reappointment, or been notiﬁed that his or her services have been, or may be, terminated. The term successor auditor refers to an auditor who is considering accepting an engagement to audit ﬁnancial statements but has not communicated with the predecessor auditor as provided in paragraphs .07 through .10 and to an auditor who has accepted such an engagement. [As amended, effective for audits of ﬁnancial statements for periods ending on or after June 30, 2001, by Statement on Auditing Standards No. 93.]
Change of Auditors
.03 An auditor should not accept an engagement until the communications described in paragraphs .07 through .10 have been evaluated.3 However, an auditor may make a proposal for an audit engagement before communicating with the predecessor auditor. The auditor may wish to advise the prospective 1 The provisions of this section are not required if the most recent audited ﬁnancial statements are more than two years prior to the beginning of the earliest period to be audited by the successor auditor. 2 There may be two predecessor auditors: the auditor who reported on the most recent audited ﬁnancial statements and the auditor who was engaged to perform but did not complete an audit of any subsequent ﬁnancial statements. [As amended, effective for audits of ﬁnancial statements for periods ending on or after June 30, 2001, by Statement on Auditing Standards No. 93.] 3 When the most recent ﬁnancial statements have been compiled or reviewed in accordance with the Statements on Standards for Accounting and Review Services, the accountant who reported on those ﬁnancial statements is not a predecessor auditor. Although not required by this section, in these circumstances the successor auditor may ﬁnd the matters described in paragraphs .08 and .09 useful in determining whether to accept the engagement.
The Standards of Field Work
client (for example, in a proposal) that acceptance cannot be ﬁnal until the communications have been evaluated. .04 Other communications between the successor and predecessor auditors, described in paragraph .11, are advisable to assist in the planning of the engagement. However, the timing of these other communications is more ﬂexible. The successor auditor may initiate these other communications either prior to acceptance of the engagement or subsequent thereto. .05 When more than one auditor is considering accepting an engagement, the predecessor auditor should not be expected to be available to respond to inquiries until a successor auditor has been selected by the prospective client and has accepted the engagement subject to the evaluation of the communications with the predecessor auditor as provided in paragraphs .07 through .10. .06 The initiative for communicating...