You are a member of the Quality Control Committee of a large audit firm; Art Andersunn and Co$.$ Part of the committee$$s responsibility is to determine whether prospective clients are acceptable and whether existing clients should be retained. Being a large practice, numerous potential clients are brought to the committee for consideration and the following list includes a number of recent such cases where the audit appointment is available.

$1.$

Nicotar $($Pty$)$ Ltd$,$ a company which manufactures cigarettes.

$2.$

Bluevex Ltd$,$ a public company which owes its current auditors R$75000$ in audit fees. The company$$s audit committee claims that the current auditors have overcharged.

$3.$

King Couriers Ltd$,$ a company which has on two previous occasions sued its auditors and on both occasions the auditors $($different firms$)$ have admitted negligence and settled out of court.

$3$

$4.$

Skweeze $($Pty$)$ Ltd$,$ a chain of retail shops which sells pornographic materials and runs escort agencies. The company is a subsidiary of a listed company in the entertainment sector. The holding company auditors have declined the audit.

$5.$

Interworld $($Ltd$),$ prestigious, International Corporation with operations worldwide and its head office in Johannesburg.

Required:

Discuss the matters to which the committee should give consideration, when deciding on whether to accept the above prospective clients. $(5$ x $4$marks$)$