You are a member of the Quality Control Committee of a large audit firm; Art Andersunn and Co. Part of the committees 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 several recent such cases where the audit appointment is available.

1. Nicotar (Pty) Ltd, a company which manufactures cigarettes. (3)

2. Bluevex Ltd, a public company which owes its current auditors R75 000 in audit fees.

   The companys audit committee claims that the current auditors have overcharged. (2)

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. (7)

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. (4)

5. Interworld (Ltd), prestigious, International Corporation with operations worldwide and its

   head office in Johannesburg. (4)

Required:

Discuss the matters to which the committee should give consideration, when deciding on whether to accept the above prospective clients (consider each scenario above independently).