Acceptance And Continuance Procedure

Question 1

Matters to consider before accepting client

Answer 1

1. Competence, knowledge resources, staff, time
2. Integrity of owners directors and mgmt of client
3. Firm and Engagement team Comply with legal and ethical requirements
4. Significant matters on previous engagement

Question 2

Threats

Answer 2

1. Threats to professional competence and due care
2. Threat to integrity

Question 3

Factors to evaluate professional competence threat

Answer 3

Understanding nature of client
Knowledge of relevant industry
Experience
Quality control policies

Question 4

Factors evaluating integrity threat

Answer 4

Knowledge and understanding of clients mgmt and Tcwg
Clients commitment to address issues

Question 5

Safeguard for professional competence threat

Answer 5

Agree realistic time frame
Assign sufficient staff
Using expert where necessary

Question 6

Safeguard to integrity

Answer 6

Send professional clearance letter to predecessor auditor
Obtain info from other source eg newspaper

Question 7

Procedure after acceptance

Answer 7

Communicate consent
Ensure removal of predecessor auditor and appointment
Engagement letter

Question 8

Professional clearance letter

Answer 8

Letter written to predecessor auditor