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

Sharma & Associates, auditors of Kaveri Textiles Ltd, want the agreed terms of the audit recorded before the audit starts. Which set of matters must the audit engagement letter (or other suitable written agreement) include under SA 210 where the terms are not fully prescribed by law?

The engagement letter must record the objective and scope of the audit, the auditor's responsibilities, management's responsibilities, the applicable financial reporting framework, and the expected form and content of reports. Items such as fees, team composition or liability restrictions are optional additions, not mandatory contents under SA 210.

1. AObjective and scope of the audit, responsibilities of the auditor, responsibilities of management, the applicable financial reporting framework, and the expected form and content of reportsCorrect
2. BBasis of fee computation, billing arrangements, composition of the audit team, and the date of the annual general meeting
3. COnly the auditor's fee and the audit timetable agreed with the Board
4. DRestriction of the auditor's liability, arrangements with the predecessor auditor, and peer review details