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Procedures before accepting an audit appointment

Prior to accepting an appointment, the audit firm must take the following steps:

  •   It must assess whether acceptance would create any threats to compliance with the fundamental principles. For example, a personal relationship between a partner at the firm and a senior member of the client’s staff could create a threat to objectivity. Lack of technical expertise could create a threat to professional competence and due care.
  • It must ensure that resources are available to complete the audit assignment; in particular, it must ensure that there will be sufficient staff available at the right time. Again, not to have sufficient resources available would create a threat to professional competence and due care.

  • It must take up references on the proposed client corporation and its directors, if they are not already known to the auditors. This is usually referred to as client screening.
  • It must communicate with the current auditors, if there are any, to establish if there are any matters that it must be aware of when deciding whether or not to accept the appointment. Although this is partly a matter of courtesy between professionals, this will involve discussion of the appointment, the client and the audit work. Such discussion will allow the firm to decide if the client is someone for whom it would wish to act.
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