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Example Of Principles Of Audit

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UNIVERSITY OF NAIROBI
Principles of auditing term paper

GROUP 3

NAME REG. NO
1. KINUTHIA ROSEMARY D33/2395/2011
2. OMONDI BRADLEY D33/2389/2011
3. KEMUNTO DOLLY D33/2375/2011
4. MENGICH NOAH D33/2460/2011

DECLARATION

We declare that this assignment is our original work and has not been submitted elsewhere for examination, award of a degree or publication. Where other people’s work, or our own work has been used, this has properly been acknowledged and referenced in accordance with the University of Nairobi’s requirements

KINUTHIA R.W. D33/2395/2011 …………………….
MICHIRA D. K. D33/2375/2011 …………………….
OMONDI B.O. D33/2389/2011 …………………….
MENGICH N.K. D33/2460/2011 …show more content…

d) Does the prospect pay their professional service providers in a timely manner?
2) Does the prospective client’s management team meet your firm’s standards of integrity? As an integral part of most engagements, the CPA will be relying on the management of the prospective client to provide meaningful disclosures and representations. Especially for tax and audit engagements, ask yourself these questions:
a) Does the business/leadership team have a history of enforcement/criminal actions?
b) Does the prospect pay its bills/honor its agreements?
c) Does the prospective client have a litigious nature, either as a plaintiff or defendant?
d) What is the reputation of the firm and its leadership team?
Upon evaluation of the client, various investigative red flags may arise. They include;
a) Frequent changes of professional service providers. Could mean a firm is opinion shopping.
b) Poor financial history. Prior failed business or bankruptcy could indicate a person who takes unjustifiable risks.
c) Work/ Business History. Unstable address, employment or professional history.
d) Overly litigious as a plaintiff or defendant. Signals a party who is not afraid to sue, presents a risk of non-payment or who may not honor their agreements.
e) High turnover in upper management. Often indicates lack of internal stability.
f) Short operating history. Where were the principals before they were at the current firm?
g)

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