Definition

A successor auditor is defined as an auditor who has recently been appointed to carry out the audit of financial statements for the organization.

He is called a successor auditor because he has newly been given a contract, and he has taken over the responsibility of another auditor (predecessor auditor), who was entrusted with a financial statements audit for the previous year.

The underlying reasons for a successor auditor can therefore, be broadly categorized into the following:

  1. The predecessor auditor was fired, terminated, or was unable to complete the audit of the financial statements.
  2. The predecessor auditor’s contract had expired, or the organization is obliged under law to change the audit requirement after the current year.

Successor Auditor and Audit Process

The successor auditor is new to the organization, and regardless of the exposure he has had when it comes to auditing other organization, he still requires a brief introduction about the company, the culture followed, and the existing financial situation of the company.

Therefore, it is also important for the organization to realize the fact that the auditor needs time to settle in the organization, and understand the fundamental operations within the organization.

Therefore, in this regard it is also important to realize the part that the successor auditor has a considerably larger ground to cover when it comes to auditing a client for the first time.

This is because he needs to get a fair idea about the nature of transactions, the internal team involved, as well as other moving parts within the organization itself.

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Successor Auditor and Communication with the Predecessor Auditor

Successor auditor might have to contact the predecessor auditor in order to get clarity about certain things pertaining to audit of the organization, so that they have clarity regarding how to go about it.

As a matter of fact, it can be seen that successor auditors are allowed to use the help of the predecessor auditors in order to get clarity on certain matters of interest.

However, this is something that cannot be solely relied on, and can just be used as a supporting document in this regard.

Conclusion

Therefore, it can be seen that successor auditor can be defined as an auditor who has recently been appointed for auditing the financial statements for the current year at hand.

As a matter of fact, it is also important to realize the fact that the successor auditor is supposed to understand the underlying dynamics of the organization, as well as the nature of transactions that exist within the company to get a fair idea about the scope of work, and the audit procedures to be designed in this regard.

Additionally, it is also important to highlight the fact that the successor auditor is often hired as a result of the predecessor auditor’s contract being terminated as a result of malpractice.

Alternatively, the contract with the predecessor auditor might have expired because of which the new successor auditor would have been appointed.