This is ultimately your choice! Of course, even if you decide NOT to take on the engagement, common sense would dictate that you will be continuing with the case study … you do not get out of it that easily!!
The important thing is to be able to be comfortable with your professional decision. Many of you might have decided to reject the engagement based on the control problems, the uncertainty issue and Rogers’ arguments with the predecessor auditor (King & Co) but it is important to appreciate that such instances are not uncommon or unusual in auditing. Public accounting is not a risk-free profession; no perfect client exists! Thus, a firm must be able to assess the problems involved and weigh them against potential rewards – this is what you may see called “engagement risk” … think about how this reinforces the significance of evaluating and documenting your potential liability using the questionnaires in the earlier exercises!
Abernethy & Chapman has an opportunity here to pick up a new client in a new industry. In addition, Lakeside offers potential for significant growth in the future. However, the auditing firm may wish to seek some resolution for the uncertainty issue before becoming involved. If successful resolution is achieved, the audit firm would most likely seek this new client – bear in mind how some of this information used for the decision to accept a new client would be useful for planning how best to organise your audit approach … MUCH of the evidence you will collect will be useful to satisfy more than a single objective during an audit (this is about audit efficiency).