In making client acceptance decisions, the audit firm will consider:
A)inherent and control risk of the client.
B)audit risk to the CPA Firm.
C)the client's business risk and the risk of material misstatements in the financial statements.
D)CPA Firm's potential ongoing revenue from the audit client.

Question

Quizplus · Accepted Answer

The audit firm will consider the client's business risk and the risk of material misstatements in the financial statements. This is because these factors will affect the audit risk and the likelihood of finding errors or fraud in the financial statements. The inherent and control risk of the client will also be considered, but they are only part of the overall risk assessment. CPA Firm's potential ongoing revenue from the audit client should not be a determining factor in acceptance decisions, as the primary focus should be on the quality of the audit and the integrity of the financial statements.

In Making Client Acceptance Decisions, the Audit Firm Will Consider