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1. Discuss the sources of information and the types of inquiries that you and the firm's partners may make in connection with accepting Hitech as a new client. 2. Do professional audit standards require any investigation of prospective clients? 3. Suppose Mr. Shine also has told you that 10 years ago his closely held hamburger franchise business went bankrupt, and on investigation, you learn from its former auditors (your own firm in another city) that Shine played "fast and loose" with franchise-fee income recognition rules and presented such difficulties that your firm resigned from the audit (before the bankruptcy). Do you think the partner in charge of the audit practice should accept Hitech as a new client?
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