Sample Workpaper 5

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.

1. 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?
2. 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?
3. 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.

Testing Results: