Explain how the acceptance of large, high-risk audit clients for relatively high audit fees may threaten an audit firm's de facto and perceived independence. Under what circumstances should such prospective clients be avoided?© BrainMass Inc. brainmass.com March 4, 2021, 7:55 pm ad1c9bdddf
The problem of perceived independence can happen when too large of a percentage of the firm's overall revenues come from the same client. Thus, the firm may be ...
The solution discusses why high risk audit clients for high audit fees should be avoided.