CA Intermediate · Auditing and Ethics · Audit Documentation
Nair & Co., auditors of Surya Foods Ltd., face a request from a successor auditor, Rao & Co., for access to their working papers after the statutory audit ended. Rao has not obtained any consent from Surya Foods. Nair & Co. also knows the working papers include a fraud-related discussion. What is the correct response under the SAs and Code of Ethics?
Nair & Co. should keep the working papers as its own property but protect client confidentiality, releasing them to the successor only with client consent or where law or professional duty allows. Fellow membership of the profession is not enough, and destroying the papers would breach retention requirements.
- ATreat the working papers as the auditor's property, but keep client information confidential and disclose only with client consent or where law or professional duty permitsCorrect
- BHand over all working papers, since they belong to the company
- CRefuse access and also destroy the working papers immediately
- DGive the papers because the successor is a chartered accountant
Explanation
Working papers are the property of the auditor, but confidentiality duties apply, so access to a successor requires client consent or a legal or professional basis. Handing over because they belong to the company is wrong on ownership, and destroying them breaches retention requirements. Being a CA does not remove the confidentiality duty.
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