RK Associates, a leading Chartered Accountant firm were approached by SK Group, for appointment as statutory auditors for their new start-up…

As per SQC 1, matters RK Associates would consider for verifying the integrity of SK Group to decide on acceptance of the engagement are as under: (i) The identity and business reputation of the client's principal owners, key management, related parties and those charged with its governance. (ii) The nature of the client's operations, including its business practices. (iii) Information concerning the attitude of the client's principal owners, key management and those charged with its governance towards such matters as aggressive interpretation of accounting standards and the internal control environment. (iv) Whether the client is aggressively concerned with maintaining the firm's fees as low as possible. (v) Indications of an inappropriate limitation in the scope of work. (vi) Indications that the client might be involved in money laundering or other criminal activities. (vii) The reasons for the proposed appointment of the firm and non-reappointment of the previous firm.