The AICPA professional issues task force issues Practice
Alert 2003-3, Acceptance and Continuance of Clients and
Engagements, to give practitioners and their firms guidance on
establishing policies and procedures for deciding whether to accept or
continue a client relationship and whether to perform a specific
engagement for that client (
www.aicpa.org/download/secps/pralert_03_03.pdf ). The alert
discusses the following elements of an effective client acceptance
program: availability of competent personnel; communication with
predecessor accountants, including auditors; assessment of
management’s commitment to the appropriate application of GAAP and
implementing and maintaining effective internal controls; assessment
of the entity’s financial viability; auditor independence and
objectivity; inquiries of third parties and background investigations.
The task force encourages AICPA member firms to incorporate the
alert’s guidance as soon as practicable.
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