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IRBA: Staff Audit Practice Alert 10_Acceptance and Continuation of Client Relationships
- 11 July 2024
- Auditing and Assurance
- South African Accounting Academy
The environment in which clients operate has become more complex, there are increased regulatory requirements and new and revised legislation in many industries - impacting the relevant acceptance and continuance assessments that audit firms make.
A distinguishing mark of the auditing profession is its acceptance of the responsibility to act in the public interest. While client acceptance and continuance is a critical step in an audit, it may not always get the appropriate level of attention. The negative actions of clients can sometimes rebound on audit firms, damaging their reputations. Addressing this risk means carefully vetting clients and their activities at every stage of the audit engagement.
Therefore, this IRBA Staff Audit Practice Alert provides registered auditors with key considerations regarding the acceptance and continuation of client relationships of audit engagements, and it covers:
- Introduction;
- Procedures or factors that an audit firm may consider when evaluating whether or not to accept/continue with an audit engagement;
- Discussions on proposals for new clients;
- Responding to identified risks;
- Terminating a client relationship;
- Resignations, due to reputational matters;
- Relevant ethical considerations from the IRBA Code of Professional Conduct for Registered Auditors (Revised April 2023); and
- An illustrative example letter for communicating with the existing or predecessor auditor.
Click here to download the 15-page Staff Alert:
Relevance to Auditors, Independent Reviewers & Accountants:
- Members of IRBA should stay up-to-date with the latest developments and plans that affect registered auditors.
- Communication with previous auditors must be done in accordance with the IRBA Code of Conduct as well as ISQM1 by all registered auditors, as non-compliance may lead to disciplinary action.
- Practitioners must be aware of the content of any guidance issued by IRBA, like this Staff Practice Alert.