Client acceptance policies and procedures generally include obtaining and reviewing financial information from prospective clients.

Required:

Your firm is considering accepting Apple Inc. as a new audit client. You are helping to perform client acceptance procedures by reviewing prior financial information. Go to the sec.gov website and search for Apple Inc.'s most recent 10-K filing. Read through the Item 1, Business, and Item 1A, Risk Factors, sections. What characteristics are red flags for potential problems? What characteristics would make Apple a desirable client?