An audit firm's quality control procedures pertaining to the acceptance of a prospective audit client would most likely include:
A)enquiry of management as to whether disagreements between the previous auditor and the prospective client were resolved satisfactorily.
B)confirmation of the prospective client's bank accounts.
C)enquiry of third parties, such as the prospective client's bankers and solicitors, about information regarding the prospective client and its management.
D)consideration of whether the internal control is sufficiently effective to permit a reduction in the extent of required substantive tests.

Question

Quizplus · Accepted Answer

Enquiring with third parties such as the prospective client's bankers and solicitors about information regarding the prospective client and its management is a common quality control procedure to ensure the integrity and reputation of the prospective client. Enquiring about prior disagreements with the previous auditor (Option A) is also important but not as critical as checking with third parties. Confirming bank accounts (Option B) and considering the internal control (Option D) are not relevant to the acceptance of a prospective client.

An Audit Firm's Quality Control Procedures Pertaining to the Acceptance