Audit firms will refuse engagements because:
A) the risk of litigation.
B) client management lacks integrity.
C) the client operates in a high- risk industry.
D) all of the above

Question

Quizplus · Accepted Answer

Audit firms may refuse engagements for a variety of reasons. The risk of litigation is a common concern, as audits can result in legal action against the auditor. If the client management lacks integrity, the audit firm may not want to associate with them and risk their reputation. Additionally, if the client operates in a high-risk industry, such as healthcare or finance, the audit firm may feel that the risks outweigh the benefits of taking on the engagement. Thus, all the given options are valid reasons for audit firms to refuse engagements.

Audit Firms Will Refuse Engagements Because