Overview
You are an audit manager at a large public accounting firm. Your audit partner approaches you with a request for proposal (RFP) from a potential client looking for a firm to audit their annual financial statements. Your sister-in-law is the chief financial officer of the company requesting the proposal and oversees most of the audit work. She is also involved in the general audits for the company. Your partner asks that you review the engagement acceptance checklist provided and write a memo on whether or not your firm can accept this engagement.
Directions
Using the information provided in the Client Profile Summary linked in the Supporting Materials section, write a memo to the audit partner explaining whether the firm should accept the engagement.
Specifically, you must address the following rubric criteria:
- Provide rationale for which professional ethics codecovers this situation over others.
- Describe the safeguards in place that reduce threats to independence.
- Explain actual versus perceived independence violations.
- Recommend whether to accept the client engagement.
What to Submit
Submit your memo as a 1- to 2-page Microsoft Word document with single spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style.
Supporting Materials
The following resource supports your work on this assignment:
Resource: Module Two Activity Client Profile Summary Use this resource to complete the assignment.
Module Two Activity Rubric
| Criteria | Exemplary | Proficient | Needs Improvement | Not Evident | Value |
|---|---|---|---|---|---|
| Professional Ethics Code | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner (100%) | Provides rationale for which professional ethics code covers this situation over others (90%) | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to the rationale for which professional ethics code covers this situation over others (70%) | Does not attempt criterion (0%) | 20 |
| Safeguards | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner (100%) | Describes the safeguards in place that reduce threats to independence (90%) | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to the safeguards in place that reduce threats to independence (70%) | Does not attempt criterion (0%) | 20 |
| Actual Versus Perceived | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner (100%) | Explains actual versus perceived independence violations (90%) | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to actual versus perceived independence violations (70%) | Does not attempt criterion (0%) | 20 |
| Client Engagement | N/A | Recommends whether to accept the client engagement (100%) | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to whether to accept the client engagement (70%) | Does not attempt criterion (0%) | 20 |
| Clear Communication | Exceeds proficiency with an intentional use of language that promotes a thorough understanding (100%) | Consistently and effectively communicates in an organized way to a specific audience (90%) | Shows progress towards proficiency, but communication is inconsistent or ineffective in a way that negatively impacts understanding (70%) | Shows no evidence of consistent, effective, or organized communication (0%) | 10 |
| Citations and Attributions | Uses citations for ideas requiring attribution, with few or no minor errors (100%) | Uses citations for ideas requiring attribution, with consistent minor errors (90%) | Uses citations for ideas requiring attribution, with major errors (70%) | Does not use citations for ideas requiring attribution (0%) | 10 |
| Total: | 100% |