A well-written audit engagement letter establishes a strong audit arrangement, helps prevent disputes, and sets clear expectations for both parties. It should be sent after verbal confirmation of the appointment as auditor and ideally, prior to the commencement of any work. It’s also important to send one to existing audit clients if they haven’t signed an engagement letter.
An audit engagement letter should include an identifying description of the professional services to be provided. This includes an evaluation of internal controls and preparation of the audit report and opinion letter. It should clearly state that no fees are contingent upon the outcome of the audit as that would compromise the independence of the auditor. It should also disclaim any obligation regarding fraud detection and other similar illegal activities.
The audit engagement letter should also contain a mediation or binding negotiation clause that will help in resolving any disputes. This will minimize the time and expense of formal litigation, and also make it easier for both parties to reach a mutually acceptable resolution.
Create a professional audit engagement letter for your new and existing clients using this simple form template by Jotform. You can customize it with your own company logo, fonts, and colors to match your brand identity. The easy-to-use drag-and-drop tool allows you to add custom fields, set up an automated signing order, and integrate with helpful widgets like Google Drive to easily store all finalized documents in one place. audit engagement letter sample