Client-acceptance decisions have become increasingly important. This is mainly due to the increased risk of litigation against audit firms in some countries as a result of being associated with failed business, unethical organizations, or perceived problems with independence. Hence, it is essential for audit firms to carefully consider the potential benefits and costs of association with prospective clients.

- How do risk evaluation and risk management affect client acceptance decisions?

- Are there situations in which risk-management strategies may cost-effectively moderate each client's unique risks?

- Does the application of these risk-management strategies increase the likelihood of accepting clients?

Based on your understanding of client acceptance, answer these questions. Consider using the results in the following study as evidence to support your arguments: Gendron, Y. 2002. On the Role of the Organization in Auditors' Client-Acceptance Decisions. Accounting Organizations and Society. 27(7): 659-684.