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In this min case you will use Willis and Adams client acceptance continuance forms to evaluate the continuance decision for EartWear as an audit client.

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In this min case you will use Willis and Adams client acceptance continuance forms to evaluate the continuance decision for EartWear as an audit client. One of the most important ways accounting firms manage their rinkis by being very careful about which companies they decide to associate with as clients. In the first year, that decision is referred to as the client acceptance decision in each subsequent year firms decide whether to continue their association with each client. This subsequent dechion process is referred to as the continuance decision. The factors that forms consider for the continuance decision are usually very similar to those considered for the initiat acceptance decision INSTRUCTIONS: Read the background information on EarthWear to prepare to evaluate the company as a continuing audit client. To open the background document please click on the following icon (a document will open in Microsoft Worch Earth Background Review Earth Wear's naudited 2016 financial statements including the Balance She come Statement and Cash worksheets to obtain a better understanding of the client and to assess its current financial condition. A senior auditor from your fem has already calculated some financial and industry ratios to help with the continuance decision Compare EarthWear's ratios to the Industry ratios provided on the tos" worksheet Pay particular attention to items that might be helpful in determining whether or not to continue with Earthwear as an audit client Review the Wills and Adams' client acceptance continuance forms Work Papers 1.1. 22. 23 and 24. which have already been completed Complete the remaining questions on Work Paper 35 using information from the background and financial statement information Evaluate and answer the following unanswered questions regarding the risk of retaining Earth Wear as an audit dient, If you selected "Yes' on any of the questions to the left provide an explanation

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