{"id":371,"date":"2020-09-30T06:16:00","date_gmt":"2020-09-30T06:16:00","guid":{"rendered":"https:\/\/www.akgvg.com\/blog\/?p=371"},"modified":"2020-12-28T09:37:25","modified_gmt":"2020-12-28T09:37:25","slug":"points-to-consider-before-accepting-the-audit","status":"publish","type":"post","link":"https:\/\/www.akgvg.com\/blog\/points-to-consider-before-accepting-the-audit\/","title":{"rendered":"Points to consider before accepting the Audit"},"content":{"rendered":"\n

Before accepting a new client, a chartered accountant firm in practice shall determine whether the acceptance would create any threats to compliance with the fundamental principles. This means that when accepting to take on a new client, the proper investigation should be donein this regarding also its owners and business activities toensure the integrity of the potential client. These investigative actions are usually performed as \u2018know your client\u2019<\/strong>. In detail this activity can be segregated into 4 sections as mentioned below:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n
  1. Background information.<\/li>
  2. Eligibility.<\/li>
  3. Management assessment.<\/li>
  4. Investigation of industry involvement and risk factor.<\/li><\/ol>\n\n\n\n

    I. Background Information<\/strong><\/p>\n\n\n\n

    1. Name of Prospective Client<\/li>
    2. Official Contact Details such as addresses, telephone, Fax and e mail addresses<\/li>
    3. Description of business and industry<\/li>
    4. Associated Risk with such industry \/ business<\/li>
    5. Position in industry<\/li>
    6. Organisational Structure i.e. subsidiary and Parent etc.<\/li>
    7. Financial Year to which assignment is given<\/li>
    8. Name of Referral Source: Self-generated\/ Others<\/li>
    9. Name of: Directors, Officersand KMP\u2019s<\/li>
    10. List of Finance & Accounts department personnel<\/li>
    11. Shareholding pattern with details of principal shareholders<\/li>
    12. List of Company’s Bankers<\/li>
    13. Name of Lawyers\/Legal Counsel<\/li><\/ol>\n\n\n\n

      II. Eligibility<\/strong><\/p>\n\n\n\n

      1. Based on the Eligibility norms laid down as per the relevant section of the Companies Act, 2013, determine that, is the firm eligible to accept the audit engagement.<\/li>
      2. Do the firm personnel who is indented to work in this assignment have knowledge of relevant industries or subject matter?<\/li><\/ol>\n\n\n\n