Client Acceptance Tool CAT Sassetti Client Acceptance Process Staff who received the referral will gather information from potential clients and complete the acceptance evaluation form. What is the Client’s Name? * Was this client referred? * Employee Submitting Form? * Type: Tax, Audit, or CAAS? * Why is the prospect changing accountants? * Obtain a copy of the prior financial statements and tax returns and review for any potential specialized reporting issues, aggressive positions taken by management, going concern issues, etc. Review gross income, ask follow up questions as necessary. Were there any disagreements with the prior accountant, including fees, accounting policies, etc.? * Have all compliance requirements been met (e.g. payroll tax filing, remittance of taxes withheld, tax filing, etc)? * What is the fee estimate for the services to be provided? * Client Acceptance Evaluation Tool This tool can assist with client acceptance decisions based on several criteria to ensure the client is a good fit for the firm. It is critically important that you answer honestly for each criteria. Step 1: Determine if this prospective client/engagement is a good fit for the firm. Rate each characteristic. Also think about additional factors that are relevant to the evaluation and add each characteristic accordingly. The client understands and is willing to pay at least our minimum fees. No Yes 0 = No, 5 = Yes After gaining an understanding of the prospective client’s annual operations and reviewing relevant reports (tax returns, regulator reports, etc), there is no evidence that would regard the engagement as high-risk or an overly agressive tax position or warrant us to not want to associate with the client 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * Our evaluation did not reveal any situations or events that raise substantial doubt about the entity’s ability to continue as a going concern. 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * The prospective client does not operate in a highly specialized or regulated industry that is outside our firm’s specialty – if rated 3 or less, see next question 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * The prospective client has agreed to be available and willing to answer questions and to provide clear answers and requested documentation in a timely fashion. No Yes 0 = No, 5 = Yes The prospective client has identified a main point of contact. No Yes 0 = No, 5 = Yes There are no concerns as it relates to management’s integrity (reputation of owners, mgmt, governance, etc.) 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * Inquiry of the prospective client did not reveal any substantial past due tax amounts or liens on property placed by state or federal tax agencies. 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * There isn’t anything that causes us to be uncomfortable about the engagement. 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * There isn’t anything that would prevent us from complying with legal and ethical requirements. 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * Firm personnel have experience and have performed at least 3 similar engagements in this relevant industry or subject matter area, and have relevant CPE within the last 12 months 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * We currently have sufficient personnel, including the use of specialists, that is needed for the engagement in order to complete the engagement within the reporting deadline 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * The proposed fee is adequate for the time/resources that is required to do a thorough engagement for all services proposed which will result in a quality profitable engagement. 1 2 3 4 5 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * Is this an A&A Engagement? Yes No A & A Only Our evaluation did not reveal any concerns relative to the attitude of the prospective client’s principal owners, key management, and those charged with governance that would indicate aggressive interpretation of accounting standards and internal control over financial reporting 0 1 2 3 4 5 0= N/A 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * The firm has go-to A&A resources to call upon for answers, should the engagement pose a situation of which we lack expertise 0 1 2 3 4 5 0= N/A 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * The firm is independent as required by the AICPA, state CPA societies, state boards of accountancy, DOL/ERISA, and other regulatory bodies, as applicable. We have considered the implications of any nonattest services to be provided , and have not noted any potential for impairment of independence. 0 1 2 3 4 5 0= N/A 1=Strongly Disagree, 2=Disagree, 3=Somewhat Agree, 4=Agree, 5=Strongly Agree If rating is 3 or less, provide your recommended solution to move the characteristic up to a rating of 4 or 5. * Step 2: Based on the above evaluations in Step 1, document your acceptance decision. For Audit Clients, firm policy is to only accept engagements with at least a score of 68 in Part 1. For Tax Clients, firm policy is to only accept engagements with at least a score of 56 in Part 1. Step 3: If your analysis in Step 2 above is to not accept one of the proposed engagements, document your consideration of working with the client in a different capacity. For example, if you are not comfortable performing the audit, offer your consulting services as their liaison to the new auditor in assisting the client in preparing for and during the audit. 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