Engagement Letter For Statutory Audit In Kings
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FAQ
A letter of engagement is a legally binding document signed by both the business and the client. Much like a contract, it sets out the terms of an agreement to carry out a specific job, project, or service package between an organisation and its client.
It is in the interests of both the entity and the auditor that the auditor sends an audit engagement letter before the commencement of the audit to help avoid misunderstandings with respect to the audit.
When should the engagement letter be sent and signed? The audit engagement letter should be sent after verbal confirmation of the appointment of you as the auditor and ideally signed before the start of any audit work.
The service provider typically prepares the Letter of Engagement, be it a law firm, accounting agency, consultancy, or any professional offering services.
It is in the interests of both the entity and the auditor that the auditor sends an audit engagement letter before the commencement of the audit to help avoid misunderstandings with respect to the audit.
Who Prepares a Letter of Engagement? An engagement letter is drafted by the company rendering the service, often with the help of a lawyer. It is than presented to the client, and both parties must sign in order for it to be legally binding.
Standard format for letters of engagement Addressee: Typically addressed to the senior management (e.g. CEO) of the client.
Dear Sir, This is to inform you that as per resolution passed in the Annual General Body meeting of _____________ CHS Ltd held on dated ____________ you are hereby appointed as statutory Auditor for the F Y ____________ to Audit the books of Accounts of our society. Kindly acknowledge the receipt.
The internal auditor and the auditee should agree on the terms of the engagement before commencement. The agreed terms would need to be recorded in an engagement letter.
