In accordance with ISQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements or Other Assurance or Related Services Engagements, Amo Osei & Partners must consider the following matters in their decision to accept the nomination as auditors of Adom Ltd:

1. Integrity of the Client
   The firm must evaluate the integrity of Adom Ltd’s management and those charged with governance. This includes assessing whether there is any history of unethical behavior, fraud, or non-compliance with laws and regulations. Information can be gathered through discussions with the former audit firm (with Adom Ltd’s permission) and public records.
2. Competence and Capability
   The firm must assess whether it has the necessary skills, knowledge, and resources to perform the audit effectively. Given that Kofi Amo and Kwame Osei are newly qualified, they should consider whether they have sufficient experience in auditing companies like Adom Ltd, which may have specific industry risks or complexities. They may need to hire additional staff or seek external expertise.
3. Independence and Ethical Requirements
   The firm must ensure compliance with ethical requirements, particularly independence, as per the IESBA International Code of Ethics for Professional Accountants. Since Adom Ltd was a client of their former firm, Kofi Amo and Kwame Osei must confirm that their prior association does not create familiarity or self-interest threats. They were not on the engagement team, which reduces this risk, but they should still evaluate any relationships with Adom Ltd’s personnel or their former firm.
4. Risk Assessment
   The firm must identify and assess quality risks associated with the engagement. This includes evaluating Adom Ltd’s business risks (e.g., financial stability, industry challenges) and audit risks (e.g., complexity of transactions, internal controls). A company search and review of prior financial statements can provide insights into potential risks.
5. Resources and Time
   The firm must ensure it has adequate resources, including human, technological, and intellectual resources, to perform the audit within the required timeframe. As a new firm, Amo Osei & Partners should assess whether they can allocate sufficient time and staff to meet deadlines without compromising quality.
6. Professional Clearance
   The firm must seek professional clearance by requesting permission from Adom Ltd to communicate with the previous auditors. This is to ascertain any reasons (e.g., disputes, ethical issues) why the previous auditors ceased to act, which could influence the acceptance decision. If permission is denied, this may indicate a lack of integrity and warrant declining the nomination.
7. Fee and Commercial Considerations
   The firm should evaluate whether the proposed audit fee is sufficient to cover the costs of a high-quality audit. They must avoid accepting a low fee that could compromise audit quality, as this could create a self-interest threat. The fee should also be assessed for recoverability, given Adom Ltd’s financial position.
8. Regulatory and Legal Requirements
   The firm must ensure it complies with any legal or regulatory requirements for accepting the engagement, such as registration with the relevant professional body (ICAG) and adherence to local laws governing auditor appointments.

By addressing these matters, Amo Osei & Partners can make an informed decision that aligns with ISQM 1’s quality management objectives, ensuring they can perform the audit effectively while maintaining ethical standards and managing risks.