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Module 12 Financial Statement Audit Engagement Letter CA. Sripriya Kumar

Module 12 Financial Statement Audit Engagement Letter CA. Sripriya Kumar. Practical/ Article Training. Learning Objectives. What is an Engagement Letter. Standard on Auditing for EL.

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Module 12 Financial Statement Audit Engagement Letter CA. Sripriya Kumar

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  1. Module 12Financial Statement AuditEngagement Letter CA. Sripriya Kumar Practical/ Article Training

  2. Learning Objectives

  3. What is an Engagement Letter

  4. Standard on Auditing for EL An Engagement Letter is the formal record of the Terms of Engagement of an auditor with a client . SA 210 deals with “Agreeing the Terms of Audit Engagements”

  5. Why Engagement Letter

  6. A sample Engagement Letter

  7. Addressed to the BoD The Objective and scope of the audit:You have requested that we audit the financial statements of {Company} which comprise the Balance sheet as at 31st March xxxx and the Statement of profit and loss account and Cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information. We are pleased to confirm our acceptance and our understanding of this audit engagement by means of this letter. Our audit will be conducted with the objective of our expressing an opinion on the financial statements.

  8. The responsibility of the auditor: We will conduct our audit in accordance with the standards on auditing (SAs) issued by the Institute of Chartered Accountants of India (ICAI). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

  9. The engagement letter also contains the following information-The responsibility of the management- Fees - Reporting Requirements A copy of the engagement letter issued by the auditor should be signed and returned by the client as a token of acceptance of the terms of the audit engagement between the parties inter se

  10. What Next? What do I Do? I understand Audit Risk!

  11. Thank You Practical/ Article Training

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