Wiley Practitioner's Guide to GAAS 2013: Covering all SASs, SSAEs, SSARSs, and Interpretations

AR 400: Communications between Predecessor and Successor Accountants

EFFECTIVE DATE AND APPLICABILITY

Original Pronouncement	Statements on Standards for Accounting and Review Services (SSARSs) 4, 7, 9, 15, and 17.
Effective Date	These statements currently are effective.
Applicability	Compilation and review engagements when a successor accountant decides (not mandatory) to communicate with the predecessor accountant about acceptance of an engagement. The successor accountant must request the client to communicate with the predecessor when the successor believes that the financial statements reported on by the predecessor are materially misstated.

DEFINITIONS OF TERMS

Predecessor accountant. An accountant who has reported on the most recent financial statements or was engaged to do so but did not complete the engagement and has resigned, declined to stand for reappointment, or been terminated.

Successor accountant. An accountant who has been invited to propose on a new engagement and is considering accepting the engagement or who has accepted an engagement to compile or review financial statements.

OBJECTIVES OF AR SECTION 400

This section discusses the circumstances when communications between predecessor and successor accountants may be desirable and the types of inquiries a successor may decide to make. The section was initially based on Statement on Auditing Standards (SAS) 7, Communications between Predecessor and Successor Accountants (superseded by SAS 84; see Section ...