The primary purpose of establishing quality control policies and procedures for deciding whether to accept new clients is to:
a.Provide reasonable assurance that personnel will be adequately trained to fulfill their assigned responsibilities.
b.Monitor significant deficiencies in the design and operation of the client's internal control.
c.Identify noncompliance with aspects of contractual agreements that affect the financial statements.
d.Minimize the likelihood of association with clients whose management lacks integrity.
Answer:D
Choice "D" is correct. Policies and procedures should be established for deciding whether to accept a new client in order to minimize the likelihood of association with a client whose management lacks integrity.
Choice "b" is incorrect. Policies and procedures established for deciding whether to accept a new client would not aid in monitoring internal control deficiencies. A review of internal control would not occur until after a new client was accepted.
Choice "c" is incorrect. Policies and procedures established for deciding whether to accept a new client would not aid in identifying noncompliance with contractual agreements. Reviewing the terms of contractual agreements would not occur until after a new client was accepted.
Choice "a" is incorrect. Policies and procedures established for deciding whether to accept a new client would not aid in the adequate training of personnel. Personnel management policies would be used to ensure that training needs are met.