Assessment of integrity between management and the client Irregularities in material and fraud activity Recognition of special circumstances and unusual risks Assessment of the competence for performing the audit Auditors independence Determination of the auditors’ liabilities Preparation of the engagement letter and signature of the client Development of checklist To start an audit establishment of good relationship between clients an auditor is very essential and it is done by asking appropriate questions to the clients

Assessment of integrity between management and the client

Irregularities in material and fraud activity

Recognition of special circumstances and unusual risks

Assessment of the competence for performing the audit

Auditors independence

Determination of the auditors’ liabilities

Preparation of the engagement letter and signature of the client

Development of checklist

To start an audit establishment of good relationship between clients an auditor is very essential and it is done by asking appropriate questions to the clients. BSF Ltd. Company should select those clients who are reliable with their ethical requirements.

Step one: If a company fails to choose right client they may face financial losses and damage of reputation. The company should consider the circumstances when it accepts a new client or decides to continue with an existing client.

Step two (Ethical and legal consideration): BSF Ltd. expects that their client should maintain same ethics as it has. The quality and behaviour of integrity should be matched with the client. The threats of risk may arise if the audit company’s member has shares in the clients. Then client should not be turned down, rather reduction of threats must be done at an acceptable level. Another ethical matter is conflict of interest. The letter of professional clearance is required to accept the new clients.

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