Client Acceptance of Audit Exercise and Retention of Reports

Procurement and Audit notes revision

According to Companies Act, 2015, the following are the procedures that a proposed auditor must undertake before accepting nomination.
1. Ensure he is professionally, legally and ethically qualified to act as an auditor. The auditor must ensure that he has not contravened any provisions of the Companies Act in regards to independence. He must ensure that he is not a servant or in partnership with a servant of the company. He must also ensure that he has fulfilled all the professional ethical requirements in regard to independence. i.e. he must not have any personal, family or business relationships with the prospective client among other provisions.
2. Establish whether the firm’s resources are adequate to service the needs of the new client i.e. staff time with the necessary technical competence.
3. Seek references about the status of the company and its management. Such references will assist the auditor in assessing the potential risk in associating with this new client. Information sought would include the reputation of the company and its directors.
4. Communicate to the present auditor. Communication enables one to get necessary information that could guide him on whether to accept or reject nomination. Secondly, to enquire reasons for the change in auditors and as a detail of professional courtesy.

Procurement and Audit notes revision

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