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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Professional appointments

Kestrel & Partners is asked to replace Holt LLP as auditor of Brandt Co. Before accepting the appointment, what must Kestrel & Partners do first under the IESBA Code?

Kestrel & Partners should first obtain Brandt Co's permission to contact Holt LLP and then ask Holt LLP whether there are professional reasons not to accept. Confidentiality requires client consent, and the enquiry must precede acceptance so that any ethical or legal issues are identified before the appointment.

  1. ARequest permission from Brandt Co to communicate with Holt LLP, then ask Holt LLP about any professional reasons for the changeCorrect
  2. BContact Holt LLP without telling Brandt Co, to obtain the previous working papers
  3. CAccept the appointment, then notify Holt LLP once the engagement letter is signed
  4. DObtain the audit files from Holt LLP and base the audit plan on them

Explanation

The proposed auditor must ask the client for permission to contact the existing auditor, since confidentiality applies. It should then enquire whether there are professional reasons it should not accept. Contacting Holt LLP without consent breaches confidentiality, and notifying after acceptance defeats the purpose of the enquiry.

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