Choice "A" is correct. When a predecessor auditor's report is not presented, the successor auditor should indicate the following items:
That the statements were audited by a predecessor auditor. The predecessor auditors should not be named unless the practice of the predecessors was acquired by or merged with that of the successor.
The type of opinion expressed by the predecessor auditor and, if the opinion was modified, the reason for the modification.
The nature of any emphasis-of-matter or other-matter paragraph included in the predecessor auditor's report.
The date of the predecessor auditor's report.
Choice "d" is incorrect. The comparative audit report does not need to be updated for this situation.
Choice "b" is incorrect. There is no requirement that the comparative financial statements NOT be issued in such circumstances.
Choice "c" is incorrect. There is nothing preventing the successor auditor from referencing the prior year's statements in this situation.
