QS Study

Accepting the engagement Letter of Audit

An engagement letter defines the legal relationship or engagement between a professional firm and its clients. The letter details the terms, conditions, and compensation arrangement of the professional relationship. These letters are commonly required by services firms engaged in tax, audit, finance, consulting, and legal advice.

The audit engagement letter states the terms and conditions of the engagement, principally addressing the scope of the engagement and the terms of compensation for the firm.

Accepting the Engagement: The matter should be mention in the engagement latter-

  • The remuneration of the auditor.
  • Terms and conditions of the company.
  • The liability of an auditor.
  • The responsibility of the auditor.
  • The rights and obligations of the auditors.
  • The dismissed service of the auditors.
  • The duration of the auditors.
  • The date which will be a commencement of the profit.
  • The scope of the auditors.
  • The principle which will be followed by the auditor.
  • The principle which will be followed by the board of director.
  • The duration of the services of the auditor.
  • The status of the auditors.