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When approached to conduct an Assurance Engagement for a new client, e.g. due diligence review, should we / can we (with client permission) approach their Audit firm as part of KYC procedures?
It’s not part of KYC due diligence but a professional requirement – see page 21 of the notes. Sometime called “professional clearance” or “professional etiquette” this is covered in the “changes in a professional appointment” section of Section 210 (Professional appointment) of the ACCA Code of Ethics and Conduct:
“The proposed accountant shall write to the existing or predecessor accountant (i.e. auditor)
requesting all the information which ought to be made available to enable the
proposed accountant to decide whether or not to accept the appointment.”
Thank you that makes sense.
Which leads to another question.. if the auditor does not respond, after the usual appropriate chasing, as a proposed accountant we can then decide whether to proceed or not, weighing up the risk?
As a matter of professional courtesy the existing accountant should reply – section 210 provides as follows:
“210.13A If the existing accountant continues to fail to reply, or fails to supply satisfactory
replies, the proposed accountant shall generally send a further letter by a recorded
delivery service. The letter shall state that unless a reply is received within a stated
period, say seven days, the proposed accountant will assume there are no matters
of which he/she should be aware and, at the end of the stated period, will proceed
to accept the appointment.”
So the existing accountant cannot prevent a proposed accountant from taking over the client by not replying.
Great, thank you,