What it is
Acceptance and continuance is a component of the firm’s system of quality management. The firm decides whether it can perform the engagement competently, whether it can comply with ethical requirements and whether it has considered the integrity of the client.
This checklist covers the evaluation for new and recurring engagements: client integrity, engagement risk, independence, preconditions under AU-C 210, and the approval. Complete it before work starts and refresh it each year.
When to use it
- Before accepting a new client or engagement.
- Each year for recurring audits, reviews and compilations.
- When circumstances change: new owners, management turnover, a dispute or a regulatory issue.
What’s inside
- Client integrity and business
- Engagement fit, competence, risk rating and fees
- Independence, nonattest services and conflicts
- Preconditions and engagement terms
- Continuance-only questions
- Approval and decision record
Standard cited
This template follows SQMS No. 1 / AU-C 210. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 210 explained.
Questions
Is this needed for every service?
Firm policy sets the scope. The standards focus on attest engagements, but many firms run a lighter version for tax and advisory clients.
What about unpaid fees from a prior year?
Past-due fees from an attest client can create a threat to independence, in particular if they are loan-like. Review them as part of continuance.
Do we need to contact the predecessor?
For an audit, AU-C 210 requires the successor auditor to request management’s permission for the predecessor to respond, and to make inquiries of the predecessor before accepting. Document the request and the conversation.
Related templates
- Engagement Independence Confirmation (AICPA Code ET 1.200)
- Audit Engagement Letter (AU-C 210)
- Review Engagement Letter (AR-C 90)
- Compilation Engagement Letter (AR-C 80)
Last updated 11/05/2026. All free templates.