Johnson, Inc., a closely held company, wishes to engage Norr, CPA, to examine its annual financial statements. Johnson was generally pleased with the services provided by its prior CPA, Diggs, but thought the audit work performed was too detailed and interfered excessively with Johnson's normal office routines. Norr asked Johnson to inform Diggs of the decision to change auditors but Johnson did not wish to do so.

Required:

a. List and discuss the steps Norr should follow before accepting the engagement.

b. What additional procedures should Norr perform on this first-time engagement over and beyond those Norr would perform on the Johnson engagement of the following year?