An auditor's engagement letter most likely would include:

Question

Quizplus · Accepted Answer

Choice "A" is correct. An understanding with the client should be established regarding management's responsibilities, which include establishing and maintaining effective internal control over financial reporting. This is generally documented in an engagement letter. Choice "B" is incorrect. During the planning process, the auditor must document evidence of the assessment of the risk of material misstatement due to fraud. This information would be included in the audit documentation, not in the engagement letter. Choice "C" is incorrect. Management is not responsible for illegal acts committed by employees, and therefore the engagement letter would not include such a statement. Choice "D" is incorrect. The auditor generally does not contact the client's lawyer directly; rather, a letter is sent from management to the lawyer requesting corroboration of information related to litigation, claims, and assessments. The engagement letter therefore would not include a request for permission to contact the attorney.

An Auditor's Engagement Letter Most Likely Would Include