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Terms of engagement set out the basic facts of your valuation instruction so that there is no confusion about what you have been asked to do. They also define the scope and depth of the service you will provide, and in doing so set boundaries to your liability.
The contents of the engagement letterThe objective and scope of the audit;The responsibilities of the auditor;The responsibilities of management;The identification of an applicable financial reporting framework; and.Reference to the expected form and content of any reports to be issued.10-Mar-2012
What to include in your engagement letter?Identification. Properly identify the individual, group, entity or part of an entity who will receive your services.Scope of your services.Engagement period.Fee structure.Responsibilities.Professional standards.Confirmation of terms.
This information is stated in an engagement letter, which is prepared by the auditor and sent to the client. If the client agrees with the terms of the letter, a person authorized to do so signs the letter and returns a copy to the auditor.
An engagement letter is a written agreement that describes the business relationship to be entered into by a client and a company. The letter details the scope of the agreement, its terms, and costs. The purpose of an engagement letter is to set expectations on both sides of the agreement.