Document ID: chunk:federal_register_of_legislation:F2020C00630:reg:25:p10
Version: federal_register_of_legislation:F2020C00630
Segment Type: reg
Provision Reference: reg 25 (pt 10/31)
Character Range: 35111–38369

the acceptance and continuance of client relationships and specific engagements, designed to provide the firm with reasonable assurance that it will only undertake or continue relationships and engagements where the firm:

(a)                Is competent to perform the engagement and has the capabilities, including time and resources, to do so;  (Ref: Para. A18, A23)

(b)                Can comply with relevant ethical requirements; and

(c)                Has considered the integrity of the client, and does not have information that would lead it to conclude that the client lacks integrity.  (Ref: Para. A19‑A20, A23)

27.               Such policies and procedures shall require:

(a)                The firm to obtain such information as it considers necessary in the circumstances before accepting an engagement with a new client, when deciding whether to continue an existing engagement, and when considering acceptance of a new engagement with an existing client.  (Ref: Para. A21, A23)

(b)                If a potential conflict of interest is identified in accepting an engagement from a new or an existing client, the firm to determine whether it is appropriate to accept the engagement.

(c)                If issues have been identified, and the firm decides to accept or continue the client relationship or a specific engagement, the firm to document how the issues were resolved.

28.               The firm shall establish policies and procedures on continuing an engagement and the client relationship, addressing the circumstances where the firm obtains information that would have caused it to decline the engagement had that information been available earlier.  Such policies and procedures shall include consideration of:

(a)                The professional and legal responsibilities that apply to the circumstances, including whether there is a requirement for the firm to report to the person or persons who made the appointment or, in some cases, to regulatory authorities; and

(b)                The possibility of withdrawing from the engagement or from both the engagement and the client relationship.  (Ref: Para. A22‑A23)

Human Resources

29.               The firm shall establish policies and procedures designed to provide it with reasonable assurance that it has sufficient personnel with the competence, capabilities, and commitment to ethical principles necessary to:

(a)                Perform engagements in accordance with AUASB Standards, relevant ethical requirements, and applicable legal and regulatory requirements; and

(b)                Enable the firm or engagement partners to issue reports that are appropriate in the circumstances.  (Ref: Para. A24‑A29)

Assignment of Engagement Teams

30.               The firm shall assign responsibility for each engagement to an engagement partner and shall establish policies and procedures requiring that:

(a)                The identity and role of the engagement partner are communicated to key members of client management and those charged with governance;

(b)                The engagement partner has the appropriate competence, capabilities, and authority to perform the role; and

(c)                The responsibilities of the engagement partner