Which of the following matters is generally included in an auditor's engagement letter?
A)The financial accounting framework that will be applied.
B)Factors to be considered in establishing preliminary judgments about materiality.
C)Management's liability for all illegal acts committed by its employees.
D)The auditor's responsibility to obtain negative assurance relating to non-compliance with laws and regulations.

Question

Quizplus · Accepted Answer

The financial accounting framework that will be applied is typically included in an auditor's engagement letter. This helps to establish the basis for the audit and ensures that the auditor and client are in agreement about the accounting principles and standards that will be used. Factors to be considered in establishing preliminary judgments about materiality may also be discussed, but this is not typically included in the engagement letter. Management's liability for illegal acts committed by employees and the auditor's responsibility to obtain negative assurance relating to non-compliance with laws and regulations are not matters typically included in the engagement letter.

Which of the Following Matters Is Generally Included in an Auditor's