This was Beaudean’s first opportunity to work on a new client assessment. He had to be certain to follow all of the required procedures and perform adequate due diligence when analyzing the project. Prior to accept an audit engagement any CPA firm should ruminate several considerations. First of all, the audit firm should carry out a background assessment and review of the client to ensure that the company’s history, nature of its activities, any areas of possible risk and any information is well documented and analyzed before accepting the engagement. Further, the audit firm should contact the outgoing auditor to investigate any key factors or matters of importance that the new audit firm should be aware of and identify any reasons as to why the outgoing auditor was terminated. Therefore, lack of response from the Miles Frazer about any pending litigation issues or any other legal matters that the firm sho...
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...qualified and competent auditors and CPAs who will help with the audit work.
• Obtain a letter of representation from the management on their responsibility to warrant that the amounts recorded in the books of account and financial statements are true and fair. Furthermore, any important information required to be disclosed to the audit firm by the CEO must be disclosed such as any legal matters etc.
By doing so, I will examine the past records of financial performance to recognize whether there are any going concern problems and if there were any problems with the going concern, adequate measures have been placed. Any matters that may affect the operations of the firm and the going concern such as legal matters should also be addressed. All loan covenants should also be upheld. Upon the confirmation and adherence to the above factors, I would accept the engagement.
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