Make a decision whether to accept the client
i. Using all background and permanent information provided, document answers to the following questions. These 3 elements must be considered in making the decision to accept the client.
- Client integrity. During the planning process, has any information come to light that indicates this client has a poor reputation, is willing to accept or be exposed to significant unnecessary risks, is unwilling to follow standard internal control procedures and/or accounting rules, is unwilling to be open and honest in its relationship with our audit firm, or is unwilling to pay audit fees?
- Professional Ethics. During the planning process, has any information come to light that indicates this client is dishonest, involved in illegal activities, or aggressive in its interpretations of accounting rules?
- Threats to independence. Were there any issues highlighted in the independence testing steps that identified threats to independence that would affect the decision to continue auditing this client?
ii. Document a summary of any information that has come to light that would affect the decision to accept the client and conclude as to whether the client will be accepted.