Before accepting a new client, most audit firms investigate the company to determine its acceptability. However, confidentiality requirements prohibit audit firms from contacting certain parties-such as the company's attorneys and bankers-during this investigation.

Question

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Audit firms often perform due diligence before accepting a new client, which includes contacting third parties such as the company's attorneys and bankers, usually with the client's permission, to gather relevant information and assess risk.

Before Accepting a New Client, Most Audit Firms Investigate the Company