（1991）Risk Containment：Exploring Auditor Decisions in the Engagement Process.pdfVIP

16 Auditing: A Journal of Practice Theory Vol . 10, No. 2 Fall 1991 Risk Containment : Exploring Auditor Decisions in the Engagement Process H. Fenwick Huss and Fred A. Jacobs SUMMARY The audit engagement decision is the result of two sets of decisions: the prospective clients and the proposing audit firms . The selection of inde- pendent auditors by corporations has been extensively researched, but lit- tle attention has been given to the auditors decision processes in accept- ing new clients . Moreover, existing audit risk models do not incorporate risk assessments made prior to the engagement. The objectives of this study were (1) to examine preengagement decision processes by independent auditors and (2) to begin to reveal the relation- ship of these processes to auditing firms overall risk containment pro- grams. Client acceptance/continuance policies and procedures within the Big-Six accounting firms were examined . Evidence gathered from reviews of the firms written policies and from interviews with audit engagement partners revealed that significant risk assessments occur prior to accep- tance of the client. Differences were found among the Big-Six auditing firms in the importance placed on this phase of firms risk containment programs, and the differences in the preengagement risk assessments made by the firms were not just a reflection of the overall audit technologies employed by the firms . The implicati