Why might an audit firm reject a potential client?
A) the client's management lacks integrity
B) the risk of litigation
C) the client operates in a high-risk industry
D) all of the above

Question

Quizplus · Accepted Answer

All of the above reasons are valid reasons for an audit firm to reject a potential client. Lack of integrity in the client's management could indicate a higher risk of fraud or misconduct, which could harm the audit firm's reputation. High-risk industries, such as those involved in gambling or energy production, could increase the risk of litigation or regulatory scrutiny. Therefore, audit firms may choose to avoid such clients to reduce their own risks.

Why Might an Audit Firm Reject a Potential Client