3 Planning preliminary considerations

3.2 New client procedures

Where we have never previously undertaken an audit for the client, we have additional considerations as directed the Code of Ethics.
When asked to accept nomination as auditor of a company, we must: request the prospective client's permission to communicate with the existing auditor;
if the prospective client refuses to give such permission, decline the nomination;
when permission is received ask the existing auditor for all information which ought to be made available to the firm, to enable the firm to decide whether or not to accept the nomination (for an example letter see section B of the audit manual). (Guidance on consideration of whether we should request access to the predecessor auditor’s working papers can be found in 3.6 below);
if the existing auditor reports that the prospective client will not permit him to discuss the clients’ affairs with the firm, the nomination should be considered carefully before proceding; and
if the existing auditor does not reply to the letter within a reasonable period of time and the firm has no reason to believe that there are any unusual circumstances surrounding the proposed change, the firm should contact the existing auditor by another means. If the outcome is unsatisfactory or there is no response a further letter should be sent by recorded delivery. This letter should stress that unless a reply is received within a specified time, the firm will assume that there are no matters that may affect the decision to accept the nomination.
The purpose of these communications is to ensure we do not unwittingly become the means by which any unsatisfactory practices of the client or any impropriety in the conduct of its affairs may be enabled to continue or may be concealed from shareholders.
We should ensure that we comply with any local statutory or other requirements concerning acceptance of a new appointment.