An audit engagement letter:
A) is prepared by the client company and signed by a representative of the audit firm.
B) provides a guarantee that the auditor will express an opinion as a result of the audit.
C) is signed by management at the conclusion of the audit engagement.
D) specifies that management is responsible for establishing and maintaining effective ICFR.

Question

Quizplus · Accepted Answer

An audit engagement letter is a formal document that outlines the responsibilities of both parties involved in the audit. One key aspect it covers is the acknowledgment by the client's management of their responsibility for establishing and maintaining internal controls over financial reporting (ICFR). This is crucial for ensuring the integrity of the financial information that will be audited. The letter does not guarantee an opinion, is not prepared by the client nor signed at the conclusion of the audit.

An Audit Engagement Letter