Question

According to the standards of the profession, which of the following events would require a CPA performing a consulting services engagement for a non audit client to withdraw from the engagement?

1. The CPA has a conflict of interest that is disclosed to the client consents to the CPA continuing the engagement.
2. The CPA fails to obtain written understanding from the client concerning the scope of the engagement.

Answer 1

In the realm of CPA consulting services, a conflict of interest disclosed and consented to by the client does not obligate withdrawal, whereas failure to obtain a written engagement scope does.

Step-by-step explanation:

According to the standards of the profession, if a CPA discovers a conflict of interest during a consulting services engagement for a non-audit client, and the conflict is disclosed to the client who consents to the CPA continuing with the engagement, this would not necessarily require the CPA to withdraw from the engagement. The key factor is that the conflict of interest is disclosed and consented to by the client.

On the other hand, if the CPA fails to obtain a written understanding from the client concerning the scope of the engagement, this would generally require the CPA to withdraw, as it is a fundamental requirement of professional standards to have clear documentation defining the engagement's objectives, services to be performed, and the responsibilities of both parties.