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Audit Engagement Letter Template
What Is an Audit Engagement Letter?
An Audit Engagement Letter is a document that arranges the relationship between an auditor and a client. The purpose of the document is to establish an agreement between the involved parties, which will define the circumstances of how the services will be provided by the auditor to the client.
The letter can contain the different scopes of services that the auditor provides, which are dedicated to different purposes such as payroll audit, compliance audit, operational audit, etc. For example, the subject of a tax Audit Engagement Letter can be services dedicated to checking financial statements, balance sheets, and profit and loss accounts for income-tax purposes.
An Audit Engagement Letter template can be found through the link below.
How to Write an Audit Engagement Letter?
An Audit Engagement Letter can consist of parts, which include the following:
- Addressee. In the first part of the document, the sender can designate the name and the address of the client. It will help make sure the document will reach the right addressee.
- Introduction. Here the sender can introduce themselves and state on behalf of which company they are writing. This part of the letter should provide the client with the name of the company, its location, and the name of the auditor.
- Information About the Services. Senders can use this part of the document to indicate the audit services that will be provided to the client. Here they can also describe the purpose of those services, what they include, and which standards will be followed.
- Fee. The sender should designate the fee that the client is supposed to pay for the services, as well as when it should be transferred. For the convenience of the client, the sender can state the price of each service and the total price.
- Engagement Period. Here, senders can indicate the dates when the engagement period starts and when it finishes. After the engagement period is over the sender provides the client with the report and no longer provides the services mentioned above.
- Rights And Responsibilities. The obligations of the client and the sender, as well as their rights, can be described in this part of the document. If the sender needs the client to provide certain documents, disclose financial information, or do other things in order for services to be executed, they should include those statements in the document.
- Client's Acknowledgement. This part of the letter is supposed to provide the client with an area where they will confirm that they fully understand the content of the letter and accept it. The acceptance must be verified with the client's signature.
- The Sender's Signature. To validate that everything included in the document is true and correct, the sender should sign the letter.
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