Format of Engagement Letter of Auditor – Specimen Letter

Format of Engagement Letter of Auditor, Find Engagement Letter of Auditor, Download Sample Format of Engagement Letter of Auditor. in this article you can find Specimen Letter of Engagement for an Audit and Specimen Letter of Engagement for a Non-Statutory Audit Assignment.

Format of Engagement Letter of Auditor

Specimen Letter of Engagement for an Audit

• We have been appointed to audit the balance sheet of ……..as at ……… and the profit and loss account for the year ending on that date. We are pleased to confirm our accepting and our understanding of this engagement by means of this letter. Our audit will be carried out in accordance with the requirements of the Companies Act, 1956 and applicable authoritative pronouncements of the Institute of chartered
  Accountants of India with the objective of our expressing an opinion on the financial statements.
• In forming our opinion on the financial statements, we will perform sufficient tests to obtain reasonable assurance as to whether the information contained in the accounting records and other source data is reliable and sufficient as the basis for the preparation of the financial statements. We will also examine whether the information is properly presented in the financial statements.
• We wish to clarify that the responsibility for the preparation of financial statements including adequate accounting records and internal controls, the selection and application of accounting records with policies, and safeguarding of the assets of the company. As part of our audit process, we will expect to receive from management written confirmation of representations which are made to us in connection with the audit.
• The objective of the audit of financial information is to enable us to express an opinion thereon. In forming our opinion, we shall carry out procedures designed to obtain evidence that will provide reasonable assurance that the financial information is properly stated in all material respects. We have, therefore, a reasonable examination of detecting material mis-statements in the financial information long resulting in the financial information resulting from fraud or error. However since the audit evidence sought by us is persuasive rather than conclusive in nature, there is a possibility that some material misstatements of the financial information resulting from fraud and to a lesser extent error, if either exists, may not be detected.
• We look forward to full cooperation from your staff and we trust that they will make available to us the records, documentation and other information and explanations required in connection with our audit.
• As regards the audit of branches/divisions, the audited financial statements and the reports of the auditors will be considered by us.
• Our fees and out-of-pocket expenses will be billed as provided for in the terms of our appointment.

Please sign and return the attached copy of this letter to indicate that it is in accordance with your understanding of the arrangements for our audit of the financial statements.

Specimen Letter of Engagement for a Non-Statutory Audit Assignment

1. We have been appointed to audit the balance sheet of …… as at …… and the profit and loss account for the year ending on that date. We are pleased to confirm our acceptance and out understanding of this engagement by means of this letter. Our audit will be carried out in accordance with the applicable authoritative pronouncements of the Institute of Chartered Accountants of India with the objective of our expressing an opinion on the financial statements.
2. On the basis of our examination, we expect to report:

(a)        whether the balance sheet and the profit and loss account are in agreement with the books of account of the entity, and

(b)        whether, in our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view:

(i)         in the case of the balance sheet, of the state of affairs of the entity as at the last day of the accounting year; and

(ii)        in the case of the profit and loss account of the profit or loss for the accounting year.

3. In forming our opinion on the financial statement we will perform sufficient tests to obtain reasonable assurance as to whether the information contained in the accounting records and other source data is reliable and sufficient as the basis for the preparation of the financial statements. We will also examine the information is properly presented in the financial statements.
4. We wish to clarify that the responsibility for the preparation of financial statements including adequate disclosure is that of the management of the entity. This includes the maintenance of adequate accounting records and internal controls, the selection and application of accounting policies, and the safeguarding of the assets of the entity. As part of our audit program will expect to receive from management written confirmation of representations made to us in connection with the audit.
5. The objective of the audit of financial information is to enable us to express an opinion thereon. In forming our opinion, we shall carry out procedures designed to obtain evidence that will provide reasonable assurance that the financial information is properly stated in all material misstatements in the financial information resulting from fraud or error. However, since the audit evidence sought by us persuasive rather than conclusive in nature, there is a possibility that some material misstatements of the financial information resulting from fraud and to a lesser extent error if either exists, may be detected.
6. We look forward to full cooperation from your still and we trust treat they will make available to us the records, documentation and other information and explanations required in connection with our audit.
7. Our fees and out-of-pocket expenses will be billed as follows:

(A)       Audit fee

The total audit fee of Rs………. Will be billed on submission of the audit report.

(B)       Out-of-pocket expenses

All out-of-pocket expenses relating to travel and stay as well as any other expenditure incidental thereto, incurred by us in connection with the performance of our duties as auditors, shall be reimbursable to us on production of relevant bills, vouchers, etc.

8. We expect to finish the audit work and submit our report within three months from the date of our commencing the audit work.
9. We wish to emphasis that our audit report will be exclusively for your use. We shall not be liable in any way to any third party to whom you may make the audit report available.

Please sign and return the attached copy of this letter to indicate that it is in accordance with your understanding of the arrangements for our audit of the financial statements.

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