Final answer:
The least concerning factor regarding a prospective client's auditability would be important evidence being available only in electronic form, as auditors have the means to handle such information. Other factors, such as related party transactions, a lack of an audit trail, poor internal controls, and issues with beginning balances pose more significant audit challenges.
Step-by-step explanation:
Among the options provided, D) Important evidence available only in electronic form would be the least likely to cause concern about an entity's auditability. Auditors today are well-equipped to handle and examine electronic evidence, as much of audit work now involves analyzing data in electronic form. In contrast, the presence of related party transactions, lack of audit trail, disregard for maintaining adequate internal controls, and inability to review supporting details for beginning balances all pose significant challenges to an auditor in obtaining assurance regarding the fairness of financial statements.
Related party transactions may involve complex dealings that could obscure the true nature of the entity's financial position. A lack of audit trail makes it difficult to trace transactions from their inception through to the financial statements, increasing the risk of errors or fraud. Disregard of internal controls compromises the reliability of the entity's financial reporting, potentially allowing for misstatements to go undetected. Finally, if an auditor cannot review the details supporting beginning balances, it raises questions about the comparability of current year figures with those of the previous period, thus impacting the overall audit process.