South Africa Auditing, determine whether prospective clients are acceptable and whether existing clients should be retained?

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What are factors in deciding I know a few but I'm not sure how to answer a question if it ought to arise in an exam. For e.g how would you deal with "BOB&WHITE,a company which manufactures cigarettes" , "Patty&Brine, a company on 3 previous occasions before sued its auditors and during that time the auditors from different firms have admitted negligence and settled out of court.
 
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