Agreement Between Auditor And Client
It helps auditors to better plan the audit, which is effective in delivering the necessary results in a very competent manner. The engagement letter is signed by your CPA company, for example Smith and Jones. It can also be signed by the firm`s contact person, for example.B. “Joe Smith, Partner.” The order letter also has a place where the customer can sign to confirm that they accept the terms of the letter. Auditing standards require the public accountant and the client to agree on the terms of the order. If the terms of the order are changed, the accountant and the client should agree on the new terms. The mandate letter documents and confirms the acceptance of the order by the statutory auditor, the purpose and scope of the audit, the extent of the statutory auditor`s responsibilities to the client and the form of any reports. An order letter is a letter that a chartered accountant sends to his client after receiving notification of his appointment, but preferably before the start of the engagement, spating out the extent of his responsibilities in order to avoid any misunderstanding about his mandate and documents and to confirm the acceptance of the appointment, the objectives and the scope of the audit. the extent of responsibilities and the form of the reports to be made to the client.
What should not be included in the engagement letter? Don`t use jargon that only C CPAs understand. This will make your customer uncomfortable and may lead the customer to refuse to sign the letter. Don`t exaggerate what you can do. And definitely don`t add advertising or marketing information. The need for an audit letter is mainly due to the good communication between the statutory auditor and the party to the contract regarding the scope of work. It also includes ex post restrictions during the audit. The objective of these guidelines is to minimise the likelihood that a public accountant will be associated with clients whose statutory auditor is not independent; lack of integrity or accept a commitment for which they do not have the capacity or competence. Finally, the audit mandate letter is considered an important phenomenon because it helps the auditor to carry out the audit process taking into account the scope of the audit and how it must be carried out to achieve accurate results. A statutory auditor who, before the completion of the contract, is required to amend the contract into a contract offering a lower level of security should consider the appropriateness of doing so. If the conditions are changed, the auditor and the client must agree on the conditions. If the auditor and the client do not reach an agreement, the auditor should resign from the existing agreement….