The last audit of Howard Ltd. was extremely difficult, as the client did not maintain appropriate books and records during the year. Although the statutory registers were maintained, the accounting records were not updated for the first nine months of the year, as the company was without an accountant during this period. An accountant was later employed in March and has tried to reconstruct records from the details of receipts and payments available. However, the accountant has been unable to reconcile the bank account and she is not satisfied that all transactions that occurred during the year are reflected in the financial report. The audit fee submitted last year was 15% higher than the previous year, mainly because of these record keeping issues. The finance manager has been seething ever since. It is now three weeks before the annual general meeting. As the partner of another audit firm, you have been approached by the finance manager, to determine if you are interested in taking over the audit and, if so, how it would have to be arranged.

REQUIRED:

(a) List the factors you would want to clarify before you would consider taking on such an audit. List at least six (6) factors.

(b) Describe the steps which would have to occur to remove the former auditor and to appoint you as the new auditor. Describe at least three (3) steps.