The audit firm of F.A. Bloch and Co. has been approached by the following companies who wish
Question:
The audit firm of F.A. Bloch and Co. has been approached by the following companies who wish to retain Bloch for audit work:
1. Inter lewd, an internet company, whose website features explicit images of male nudes and which operates male strip clubs on the west coast of Australia.
2. Dreamtime, a company that operates gambling casino boats off shore and video game machines in major Australian cities.
3. Bernadette, an entertainment company, whose chief executive officer has been investigated by the Italian government for taking bribes, violating public securities laws, conspiring to commit bodily harm and issuing bad cheque. The CEO has not been convicted of any of these charges. The boards of directors claim that this happened many years ago, and since he has run several companies successfully.
Required:
A. What procedures should F.A. Bloch and Co. use to investigate these potential clients?
B. What would F.A. Bloch and Co. consider in determining whether to accept these clients?
Step by Step Answer:
Principles of Auditing An Introduction to International Standards on Auditing
ISBN: 978-0273768173
3rd edition
Authors: Rick Hayes, Philip Wallage, Hans Gortemaker