Sharon and Josh have already discussed some specific client acceptance issues, such as independence threats and safeguards. Sharon explains they also must consider the overall integrity of the client (that is, management of Cloud 9). This means they need to perform and document procedures that are likely to provide information about the client's integrity. Josh is a little skeptical. Do you mean that we should ask them if they are honest? Sharon suggests it is probably more useful to ask others, and the key people to ask are the existing auditors. Josh is still skeptical. "The existing auditors are Ellis & Associates. Are they going to help us take one of their clients from them? Sharon says the client must give permission first, and, if that is given, the existing auditor will usually state whether or not there were any issues that the new auditor should be aware of before accepting the work. This type of communication is covered by AS 2610 (AU-C 210 for private company clients) and is part of professional ethics. Sharon also gives Josh the task of researching Cloud 9's press coverage, with special focus on anything that may indicate poor management integrity. Sharon emphasizes they must perform and document procedures to determine whether W&S Partners is competent to perform the engagement and has the capabilities, time, and resources to do so. For example, they must make sure they have audit team members who understand the clothing and footwear business. They also must have enough staff to complete the audit on time. In addition, Sharon and Josh must perform and document procedures to show that W&S Partners can comply with all parts of the code of professional conduct, not just those that focus on independence threats and safeguards. Finally, they can draft the engagement letter to cover the contractual relationship between W&S Partners and Sharon and Josh have already discussed some specific client acceptance issues, such as independence threats and safeguards. Sharon explains they also must consider the overall integrity of the client (that is, management of Cloud 9). This means they need to perform and document procedures that are likely to provide information about the client's integrity. Josh is a little skeptical. Do you mean that we should ask them if they are honest? Sharon suggests it is probably more useful to ask others, and the key people to ask are the existing auditors. Josh is still skeptical. "The existing auditors are Ellis & Associates. Are they going to help us take one of their clients from them? Sharon says the client must give permission first, and, if that is given, the existing auditor will usually state whether or not there were any issues that the new auditor should be aware of before accepting the work. This type of communication is covered by AS 2610 (AU-C 210 for private company clients) and is part of professional ethics. Sharon also gives Josh the task of researching Cloud 9's press coverage, with special focus on anything that may indicate poor management integrity. Sharon emphasizes they must perform and document procedures to determine whether W&S Partners is competent to perform the engagement and has the capabilities, time, and resources to do so. For example, they must make sure they have audit team members who understand the clothing and footwear business. They also must have enough staff to complete the audit on time. In addition, Sharon and Josh must perform and document procedures to show that W&S Partners can comply with all parts of the code of professional conduct, not just those that focus on independence threats and safeguards. Finally, they can draft the engagement letter to cover the contractual relationship between W&S Partners and
