Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Audit Engagement, Audit Program, Audit Documentation and Audit Evidence

As per SA 210, when is it in the interests of both the entity and the auditor that the auditor sends an audit engagement letter?

The audit engagement letter should be sent before the audit begins. SA 210 says this serves the interests of both the entity and the auditor because it helps avoid misunderstandings about the audit, its scope and the responsibilities of each party.

  1. ABefore the commencement of the audit, to help avoid misunderstandingsCorrect
  2. BAfter the audit report has been signed, for record purposes
  3. COnly at the time of raising the final fee bill
  4. DOnly when the audit is being conducted for the first time in the entity

Explanation

The application material of SA 210 states that 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. Sending it after the report or only at billing defeats this purpose. The guidance is not limited to initial audits.

Did you get it right without looking?

One question tells you little. A timed set on Audit Engagement, Audit Program, Audit Documentation and Audit Evidence shows your real accuracy, how long you take and where you lose marks.

Practise Audit Engagement, Audit Program, Audit Documentation and Audit EvidenceFree diagnostic mock

More Audit Engagement, Audit Program, Audit Documentation and Audit Evidence questions