- 10 Marks
AAA – L3 – Q15 – Practice Management
Advise new auditors on ISOM 1 considerations for accepting a nomination as auditors of a former client’s company.
Question
Kofi Amo and Kwame Osei, who recently qualified as professional accountants, have decided to enter into professional practice under the firm name Amo Osei & Partners. These two were trainee accountants at an audit and assurance firm for three years before qualifying.
For their first engagement, the CEO of Adom Ltd has nominated Amo Osei & Partners for appointment as auditors of his company, though Adom Ltd was a former client of their former firm. Kofi Amo and Kwame Osei were never on the engagement team of Adom Ltd.
As beginners, Kofi Amo and Kwame Osei intend to follow best practice as required by ISOM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements or Other Assurance or Related Services. However, they are not clear on the matters they have to consider in their acceptance decision according to the standard. They have approached you, a senior partner of their former firm, for advice.
Required:
Advise Kofi Amo and Kwame Osei on the matters they may have to consider in relation to the acceptance decision on their nomination.
For their first engagement, the CEO of Adom Ltd has nominated Amo Osei & Partners for appointment as auditors of his company, though Adom Ltd was a former client of their former firm. Kofi Amo and Kwame Osei were never on the engagement team of Adom Ltd.
As beginners, Kofi Amo and Kwame Osei intend to follow best practice as required by ISOM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements or Other Assurance or Related Services. However, they are not clear on the matters they have to consider in their acceptance decision according to the standard. They have approached you, a senior partner of their former firm, for advice.
Required:
Advise Kofi Amo and Kwame Osei on the matters they may have to consider in relation to the acceptance decision on their nomination.
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