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CS Professional · Compliance Management, Audit and Due Diligence · Audit Engagement

Mehta & Co. is the new auditor of Rohini Foods Pvt Ltd and wants to reduce misunderstandings. When should the audit engagement letter ideally be sent, according to SA 210?

The auditor should send the engagement letter before the audit begins. SA 210 states this is in the interests of both the entity and the auditor because it helps avoid misunderstandings about the objective, scope and responsibilities, which would not be achieved by sending it later.

  1. AAfter the audit report is signed, to confirm what was done
  2. BBefore the commencement of the auditCorrect
  3. CAt the end of the first month of fieldwork, once risks are known
  4. DOnly when management requests it in writing

Explanation

SA 210 notes that it is in the interests of both the entity and the auditor that the engagement letter is sent before the commencement of the audit, to help avoid misunderstandings. Sending it after or during fieldwork defeats this purpose.

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