Which of the following is a negative factor influencing client acceptance and retention with respect to competence issues?
A)The audit firm does not have the affiliation with specialists to meet client needs.
B)The client has a weak accounting system with few internal controls.
C)The audit firm has conflict of interest issues that cannot be resolved prior to client acceptance.
D)There are significant regulatory reporting requirements with close monitoring by regulators.

Question

Quizplus · Accepted Answer

If the audit firm does not have the affiliation with specialists to meet client needs, the client may perceive the firm as lacking the necessary competence to perform the audit adequately. This can lead to hesitation in accepting the firm as their auditor or retaining them as their auditor. Weak accounting systems with few internal controls (B) may also be a negative factor, but this is not specific to competence issues. Conflict of interest issues (C) and regulatory reporting requirements (D) may also influence client acceptance and retention, but they are not related to competence issues.

Which of the Following Is a Negative Factor Influencing Client