Contemporary Auditing 10th Edition by Michael Knapp

Exercise 23

In early 1994, E Y officials discovered that the CBI auditors had failed to determine the true nature of the "advances" they had uncovered during the 1992 and 1993 audits. In your view, did E Y have an obligation to inform CBI management of this oversight prior to seeking the "reaudit" engagement More generally, does an auditor have a responsibility to inform client management of mistakes or oversights made on earlier audits