You are a new staff member of PA firm Winchester and Churchill, LLP a mid-sized accounting firm. Recently, you were assigned to Jacqueline Petersen, an audit partner. She asked you to complete a preliminary assessment on a potential client and provide a memorandum summarizing your research and a recommendation on the actions the firm should take concerning the potential client.

As you are playing the role of the new PA, this will be part of your research using your own perception of the profile of the potential client, key executives and governing body of the target company, and the current auditor. You have the option to model either a scenario of accepting or rejecting a prospective client, but not both.

Requirements:

Part A – What factors should you as an auditor consider prior to accepting an engagement? Explain.

Part B – List the pre-acceptance procedures and pre-acceptance evaluation that you would perform in assessing the prospective client. Provide an example of audit evidence for each step.

Part C – Whether your recommendation is to accept or reject the engagement of the potential client, identify, and describe at least two of your points in the information to highlight the impact on your professional judgment.

Answer rating: 100% (QA)

Part A Before accepting the client investigation about the client should be done by the auditor The auditor should evaluate the standing of the client in the business community relation with the previ... View the full answer