The process of evaluating the customer's potential and credibility in the auditing industry is quite challenging, as there is some factor to consider. In this case, the Tower & Tower should consider some factors with their new client, which is the Tierra Corporation. One of the primary reasons why the company should consider the Tierra Corporation as their potential customer is the fact that the firm has a good public image ( DeAngelo, 2010) . The company's manager, Lewis Edmond who is the manager of Tierra Corporation is a highly respectable many in the society, which in turn helps in shaping the company's public image. Additionally, the company has also good reputation in matters regarding its growth, annual profits as well as a successful company, which in turn implies a good business relationship with Tower & Tower Company. Additionally, the Tower & Tower Company will benefit from the business relationship with the Tierra Corporation as it will be paid a substantial amount of money for their auditing services, which will, in turn, help the company increasing its total profit. A client presents an opportunity for a business to sell its good or services with monetary values, which in turn is compensated by payment of services offered to help the company to meet its goals ( DeAngelo, 2010) .
Declining the Client
On the other hand, the Tower & Tower Company would reject Tierra Corporation offer to be their client for some factors. Firstly, the Lewis Edmond is the chairperson of the board of directors in Tower & Tower Company also the owner of the Tierra Corporation. Lewis Edmond position in both companies is likely to influence the auditing process, which should be guided by integrity and objectivity ( Demartini& Trucco, 2017) . As a result, the auditing independence of Tower &Tower Company will be compromised. While focusing on a client to carry out auditing services for, the auditing firm should ensure that the company directors, employees, and other stakeholders have no self-interests with the companies, which in turn helps the auditing firm to provide accurate financial data without being influenced by individual's self-interests. Involving individuals with self-interest is against the accounting companies principles as it impairs the company’s indigence ( Demartini & Trucco, 2017)) . Additionally, the auditing firm's independent is also at risk due to familiarity factors, in this case, Lewis Edmond is the chairperson of the Tower& Tower company which is the auditing company as well as the owner of the Tierra Corporation. His position and familiarity with the Tower and Tower company employees might interfere with the integrity of the auditing process. Hence, the company should decline the Tierra Corporation client as the search for a neutral client with no links with the company. Additionally, the Tierra Corporation has in the past been subject to illicit affairs which in turn compromises the company's activities as well as its public image. From the data, ten years ago the company was involved in inappropriate financial reports, which lead to the company being subjected to a fraud penalty. When establishing a business to engage with in auditing activities the company should have a good reputation. Also, the company's management and activities should be in line with the legal requirements and policies ( Demartini & Trucco, 2017) . In this case, the company has a previous poor record, which might in turn influence the accountability of the firm when they engage in a business activity with the auditing firm.
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Lee Tower Position
As the owner of the auditing firm Tower and Tower, declining the Tierra Corporation offer will be a perfect way to ensure that the company does not face any business challenges that might arise from engaging in a business relationship with a company that has in the past faced fraud cases. Firstly, to ensure that the company upholds its ethics and code of conduct in carrying out auditing services it would be important to decline the client as entering into a relationship with the Tierra Company will compromise the company's integrity as well as ethics ( DeAngelo, 2010) . Additionally, in an attempt to protect the company's independence, it would be essential to decline the offer and instead, search for other clients. In the auditing industry, a company's independence is at stake when the employees, board members, and other stakeholders have a relationship with the customers, as it will compromise the credibility of the financial report, which might arise from the need of some individuals to protect their self-interests ( Demartini & Trucco, 2017) . In this case, Edmond is the chairperson of the Tower & Tower Company, which is the auditing firm; his position is an influence as he is part of the board that makes an important decision that involves the company's day- to- day activities. In this case, he has the power to support a decision that favors him as the owner of the Tierra Corporation, hence, protecting his interests while compromising the auditing firm's reputation and ethics. Lastly, the company has previously been involved in a fraud case; reflect inappropriate governance of the company as well as poor financial records, which in turn can influence the auditing process.
References
DeAngelo, L. E. (2010). The auditor-client contractual relationship: An economic analysis . Ann Arbor, Mich: University of Michigan Press.
Demartini, C., & Trucco, S. (2017). Integrated Reporting and Audit Quality: An Empirical Analysis in the European Setting .
