Client Screening Processes

Client Screening Processes

Introduction

This ever-increasing frequency of accounting malpractice acts has made it essential for accountants to put into practice a range of malpractice defense procedures as a standard and usual part of their audit practice. One such practice is to set up a client-screening process intended at recognizing those clients who cause a risk of engaging the accountant in a prospect malpractice action. An effectual client-screening process can considerably decrease the probability of a malpractice claim, and resulting liability, by forcing accountants to become more acquaintance with the risks connected with both latent and current clients.

Terms of the Reference

The purpose of this report is to formulate client screening processes with special emphasizes on the risk assessment exercise which will be employed in accepting and rejecting potential audit client. The screening team will take into consideration all necessary rules and by laws as mentioned in The Accounts and Audit (England) Regulations 2011. Being an junior auditor, the audience of this report is the audit firm which will be ultimately conducting the audit of potential clients.

Client Screening Process

One of the quality control elements deals with accepting and retaining clients. The establishment of an effectual client-screening process involves a four-step process. First of all, accountants must choose when to screen current and potential clients for risks linked with accounting malpractice claims. Secondly, accountants must collect related data with regard to their clients and review the degree and nature of risk connected with every client. Third, accountants must impartially review their own qualifications to make certain that they and their staff have the essential skills and exercise to carry out the engagement. Last, accountants should settle on whether to apply defensive procedures as a way of decreasing the possibility of a potential malpractice claim.

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When to Screen Potential and Existing Clients

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Accumulating Information and Assessing Malpractice Risk ...