The Singapura Lion Development Bank (SLDB) is a medium-sized bank that is based in Singapore. It has grown rapidly over the past five years, largely because of the efforts of a young, aggressive management team who have focused on trying to obtain high levels of customer satisfaction with services and using information technology extensively to provide a wide range of services. Management has been supported fully by a four-person board of directors, one of whom is the managing director of SLDB.

You are a partner in a medium-sized accounting firm ( 25 personnel, including three partners). Recently, you have been approached by the managing director of SLDB, who is an old acquaintance from your university student days. He indicates that the current auditors (a large audit firm) are likely to be dismissed at the forthcoming annual general meeting of shareholders. The managing director informs you that disputes have arisen between management, the board of directors, and the auditors about some of the current procedures being used and the directions being followed by SLDB. He indicates that the current auditors are too conservative and not well matched to the aggressive, customer-oriented culture of SLDB.

The managing director asks whether he can nominate your firm as the new auditors. He points out that you and your firm would be a good match for SLDB because you, too, have a reputation for young, high-quality, innovative staff. He also points out that you and he have known each other for many years. In addition, a year ago you carried out a major controls evaluation of the electronic funds transfer controls within SLDB. Management of SLDB engaged you to undertake the task because you are well known as an expert in the area of computer-based information systems control and audit. Again, they were unhappy with the quality of the work undertaken by their existing auditors. Because of disputes with them, they asked you to do the job. In this light, the managing director indicates that you have a good knowledge of SLDB already.

Because of some concerns you have, you ask the managing director for several days to think about your answer. As you contemplate the answer you will give, you think about the pros and cons of accepting the engagement. On the one hand, SLDB will be your biggest client by far, and it is likely to increase the likelihood of your obtaining other large clients, especially within the financial services sector. On the other hand, neither you nor any of your colleagues has experience in the conduct of audits of financial institutions. Your client base primarily consists of medium-sized manufacturing and import-export businesses. The scope of the controls evaluation you conducted previously for SLDB was quite restricted in that it addressed only computer controls and not broader management controls. As you think about having to make the global evaluation judgment at the end of the next financial year on whether there are material errors or irregularities in SLDB's financial statements, you become increasingly uncertain about what you should do.

Required: To help you make the decision, you decide to try to list out the factors that might affect your decision. Make a list of these factors. When you have considered your list, what decision will you make? Why?