In year 1, Joe Josephs, CPA, reviewed Lander Company's financial statements. However, in year 2, the Lander Company hired Tom Holstrum, CPA, to audit its financial statements. Should Tom meet with Joe, and would Joe be considered as a predecessor auditor?
Case 2: Joseph Josephs is completing his audit of the Bolton Company's current year's financial statements and reads in SAS 114 (AU Section 380) that he should communicate his results with members of Bolton's audit committee. But, despite many requests for many years, Bolton has established no such committee-primarily since it has only two stockholders. What should Joseph do now?
a) Provide responses for each independent case on the appropriate accounting treatment.
b) Support your responses by citing the appropriate Statement on Auditing Standard (SAS) or AU Section.