Smith & Jones Audit Firm Is Determining Whether to Accept

question 26

Essay

Smith & Jones audit firm is determining whether to accept an audit engagement with Simple Things Ltd. As this would be a new engagement the audit firm sought the client's permission to contact the current auditor. The client did not give their permission, explaining that they did not want the current auditors to know they were thinking of changing.
Recently Simple Things Ltd had been in the media for management not disclosing an environmental disaster that occurred at one of their plant sites. The incident is still under investigation but if the company is found to be at fault then they may be subject to numerous lawsuits from the many private landholders near the plant.
From the information provided above, identify any reasons for not accepting the audit engagement with Simple Things Ltd.

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Definitions:

REM Rebound

The phenomenon where there is an increased frequency and intensity of REM (Rapid Eye Movement) sleep after periods of REM sleep deprivation.

Narcolepsy

An enduring disorder of sleep featuring overpowering drowsiness in daytime hours and sudden instances of sleeping.

Sleepwalking

A sleep disorder causing people to get up and walk around during deep sleep, often with no memory of the event.

Night Terrors

A sleep disorder causing feelings of terror or dread, typically occurring during non-REM sleep stages, and often accompanied by screaming, sweating, and confusion upon waking.