The first section of an engagement letter addresses the terms of the services and related report, including the auditor's performance of a(n):
A) integrated audit of the financial statements and ICFR.
B) integrated audit of the financial statements and income tax returns.
C) integrated audit of the information contained in each Form 10-Q filed during the year.
D) review of the company's monthly financial information to be filed with the SEC

Question

Quizplus · Accepted Answer

The first section of an engagement letter typically addresses the terms and scope of the audit, and an integrated audit of the financial statements and internal control over financial reporting (ICFR) is a common type of audit engagement. Choice B is incorrect because preparing income tax returns is not typically part of an audit engagement. Choice C is incorrect because the auditors do not perform audits of Form 10-Q filings; rather, they may review these filings or perform procedures related to certain disclosures contained within them. Choice D is incorrect because the engagement letter typically does not outline a review of monthly financial information unrelated to the financial statements.

The First Section of an Engagement Letter Addresses the Terms