Audit Engagement letter

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Business Finance

Description

Write a personal audit engagement letter. Instructions are attached.

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Third Writing Intensive Assignment – Writing an Engagement Letter Purpose: The purpose of this assignment is to write an engagement letter that could be used on an audit engagement. Audience: You are a partner on an audit engagement. Format: Create a well-organized, structured engagement letter using your own words. Do not copy/paste/plagiarize materials. When you upload your file, it will be electronically analyzed for plagiarism. Additional Information: o The engagement letter is usually negotiated with the audit committee and/or senior management of the client. o It spells out the engagement, and serves as the auditor’s understanding of the terms of the engagement. o There are many sample engagement letters available in the book and on the internet. o Your engagement letter should be addressed to the audit committee and address the terms of the engagement with the client. ▪ Key items often included in engagement letters: Objective of engagement, Standards applying to engagement, Procedures included in engagement, Representations of management required, Information to be furnished by client, Risk of misstatement, Materiality and issues in the engagement, Communication with those charged with governance, Internal control responsibilities, Dates of field work and expected completion, Work to be done by client at auditor’s request, Auditor fees, costs and terms of payment, Communication policies, Subpoena and other requests for client information, Employee recruitment by client, Dispute resolution terms, Party representatives, Document retention policies, Liability limitations (if permitted), Third party providers and/or offshoring of services, Any additional services. o Each major area of the engagement letter should be contained in a separate paragraph. o Documentation of the audit scope is critically important. o Be SURE you review sample engagement letters and use them to craft your letter. They will help you identify things you need to include. Turning This Assignment In: • You must upload your engagement letter via Blackboard. This is because Bb will automatically run the anti-plagiarism software on your assignment when uploaded. !!!! WARNING: COPY/PASTE/PLAGIARISM IS A VIOLATION OF ACADEMIC INTEGRITY AND WILL RESULT IN AN INSTANT “F” IN THIS COURSE !!!! GRADING RUBRIC FOR ENGAGEMENT LETTER COMMUNICATION CONVENTIONS (GRAMMAR / SPELLING) • Spelling error: -5% for each infraction • Grammatical issue: -5% for each infraction • Sentence fragment: - 5% for each infraction • Each major area of the engagement letter contained in separate paragraph OPENING • CPA firm is listed at top of letter • Name of person letter is addressed to • Position of person letter is addressed to • Name of client firm VITAL CONTENTS • What the engagement is (i.e., an audit) • Objective of engagement (i.e., AUDIT OPINION) • DATES the engagement covers (January 1 – December 31st, 2016) • Standards applying to engagement • Internal control responsibilities (if applicable) • SCOPE OF THE AUDIT MUST BE SPELLED OUT o Auditor’s responsibilities ▪ F/S will be sampled ▪ Opinion expressed ▪ Reasonable assurance will be provided ▪ WHEN the opinion will be issued o Management’s responsibilities ▪ MGT is responsible for preparing F/S ▪ MGT is responsible for governance ▪ MGT responsible for effective internal control ▪ MGT will provide access to personnel and records so the engagement can be completed o What the engagement will cover / what it will not cover • Costs and terms of payment ADDITIONAL CONTENTS REQUIRED: • Procedures included in engagement, Dates of field work and expected completion, Work to be done by client at auditor’s request, Auditor fees, Communication policies, Subpoena and other requests for client information, Employee recruitment by client, Dispute resolution terms, Party representatives, Document retention policies, Liability limitations (if permitted), Third party providers and/or offshoring of services, Any additional services, Risk of misstatement, Materiality and issues in the engagement, Communication with those charged with governance
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Explanation & Answer

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Surname 1

Student’s name
Professor’s name
Course title
Date of submission

FIRM NAME
Certified Public Accountants
24/4/2017
Jack Winston
Managing director
Xyz Company
Address 1
Address 2
Company city state
Dear Sir,
This letter confirms our understanding of the objectives and terms of our engagement as
well as the limitation and the nature of the services to be provided by us. This letter is aimed at
setting the basis of the auditor of the company and the areas of responsibility of the client and
our auditing company. This letter will apply in respect to the service and statutory audits for the
period that has ended from January 1st to December 31st, 2016 unless otherwise an agreed

Surname 2
decision is reached in writing and other works which are associated with any of the services
performed under this agreement.
The audit will be done on the basis in that the people who are in the management
understand and acknowledge the responsibilities they have which are to maintain proper
accounting records and prepare the financial statement which does give the accurate picture as
well as complying with the company’s act of 1963 to 2016. For fair presentation preparation of
the financial statement by generally accepted principle and the International Financial Reporting
Standards, the financial statement ought to give a fair view of the company affair and state which
regard to the profits and losses as at the end of the fiscal year. For the internal control as
determined by the management, it is essential so as to enable the preparation of financial
statements which are free from errors, mat...


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