Question

In: Accounting

The case states that the firm of Abernethy and Chapman is considering the acceptance of clients...

The case states that the firm of Abernethy and Chapman is considering the acceptance of clients that are publicly traded. What specific steps would the firm have to take before they could accept an audit client that is publicly traded?

Solutions

Expert Solution

The firm should consider whether a relationship with or service provided by an auditor :

a)creates a mutual or conflicting interest with their audit client

b)places them in the position of auditing their own work

c)results in their acting as management or an employee of the audit clent ;or

d)places them in a position of being an advocate for the audit client

Specific Prohibited Non -Audit Services

providing following non -audit services to an audit client including its affiliates :

*Bookkeeping

*Financial information system design and implementation

*Appraisal or valuation services ,fairness option or cntribution in kind reports

*Actuarial services

*internal audit outsourcing services

*management function or human resourses

legag services and expert servicesunrelated to the audit

Pre -approval of Permitted services

alisting company standard require to pre approve all audit ,review and attest services regardless of whether the firm performing the services is the company principal auditor

ekkarill92 answered 1 year ago
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