Auditing and Assurance Services 9th Edition by Alvin Arens,Mark Beasley,Randy Elder

Exercise 35

The audit committee of the board of directors of Rebel Corporation asked Tish Field, CPAs, to audit Rebel's financial statements for the year ended December 31, 2013. Tish Field explained the need to make an inquiry of the predecessor auditor and requested permission to do so. Rebel's management agreed and authorized the predecessor auditor to respond fully to Tish Field's inquiries.
Required:
a. What information should Tish Field obtain during its inquiry of the predecessor auditor prior to accepting the engagement?
b. What additional audit procedures should Tish Field perform in evaluating Rebel as a potential client?
c. After a satisfactory communication with the predecessor auditor, Tish Field drafted an engagement letter that was mailed to the audit committee of the board of directors of Rebel Corporation. The engagement letter clearly set forth the arrangements concerning the involvement of the predecessor auditor and other matters. What matters would Tish Field generally have included in the engagement letter?
(AICPA, adapted)