Question

When should an accountant not offer a service?

Answer 1

There are number of factors which affect the Accountant's decision to accept an engagement. Below are few scenarios where an accountant should not accept to offer services:

1. The accountant has reason to believe that relevant ethical standards, including independence, will not be satisfied.

2. The accountant has cause to doubt management's integrity such that it is likely to affect proper performance of its services. For new engagements where there was no previous relation with the management, it is difficult to access management's integrity. In such save, Accountant can perform due diligence procedures with respect to management. Due diligence procedures include doing market research of the entity, communicating with predecessor accountant and enquiring whether there are any circumstances that should be taken into account that might influence their decision to accept the engagement.

3. Management or those charged with governance impose limitations on the scope of accountant's work. This would include , among other things, restricted access to accounts and records maintained by the entity and opening balances, unrealistic deadlines or loss of trust in the management.

4. Where Accountant as reasons to believe that there is no clear division of responsibilities among management and on accountant's part. For instance, it is management's responsibility to prepare and maintain financial books and records. There should be clear understanding of duties between management and accountant.