Coconut Company approached Marcos' audit firm to audit its financial statements for the year ended a year ago. The company informed Marcos' audit firm that they have attempted to reach its predecessor auditor for the past six months but to no avail and therefore decided to engage Marcos' firm to audit its financial statements for the year ended a year ago (the last financial year audited by the predecessor ended two years ago). Given the above circumstances, Marcos' audit firm has performed a search of predecessor from the Accounting and Corporate Regulatory Authority and found out that it had been "removed" (dissolved). It was a sole proprietorship and the auditor being the sole proprietor, did not renew its practicing license.

Can Marcos' audit firm accept Coconut Company for this audit engagement? Does Marcos' need to seek professional clearance given the above circumstances?

What are the essential requisites to accept a new client?

What are the essential requisites to reject a new client?

What is the importance of Engagement letter?