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

Where law or regulation sufficiently establishes the objective and scope of an audit and the responsibilities of management and the auditor, what does SA 210 permit the auditor to include in the engagement letter at minimum?

The auditor may include only a reference that the relevant law or regulation applies and that management acknowledges and understands its responsibilities. The auditor may still add the other matters for management's information if considered appropriate.

  1. AOnly the basis of fee computation and billing arrangements
  2. BOnly a reference that the relevant law or regulation applies and that management acknowledges and understands its responsibilitiesCorrect
  3. CNothing at all, since no letter is needed in such cases
  4. DOnly the composition of the audit team and the timetable

Explanation

SA 210 allows the auditor, in such circumstances, to include in the letter only a reference to the fact that relevant law or regulation applies and that management acknowledges and understands its responsibilities. The auditor may still choose to include the other matters for management's information. Fees and team composition are optional items, not the minimum.

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