Choice "D" is correct. Before accepting a new audit engagement, the auditor is required to make inquiries of the predecessor auditor regarding matters that may bear on management integrity. Making inquiries of the predecessor auditor regarding matters that may affect the conduct of the audit and developing an understanding of the prospective client's business and industry are tasks which may be performed after acceptance of the engagement.
Choices "c", "a", and "b" are incorrect, based on the above explanation.
