The audit partner of an accounting firm has just advised you that he has been approached to accept appointment as the auditor for Nevada Limited, a manufacturer of gaming machines. Nevada has been named in a recent anti-corruption inquiry as having offered incentives to Members of Parliament to support a proposed bill which would allow an increased number of gaming machines in licensed premises. No charges have yet been laid against Nevada or any of its employees. The audit partner explains to you that Nevada’s auditors were reappointed for the current financial year at the annual general meeting held two months ago. However, Nevada’s managing director is unhappy with the existing auditing firm as the audit partner assigned to Nevada had been changed.

Required

(a) The audit partner is unsure what to do and has asked you to outline any ethical or other factors he should consider in deciding whether or not to accept the appointment for the current year.

(b) What information should be obtained from the previous auditor?