AAA – L3 – SA – Q1.4 – Engagement Letter

Contents of a statutory audit engagement letter.

Question

Matters covered in an engagement letter for a statutory audit will normally include:

1 Use of internal audit

2 Use of experts

3 Number of audit personnel who will be involved in the audit

4 Basis of fees

A 1, 2 and 3 only

B 1, 3 and 4 only

C 2, 3 and 4 only

D 1, 2 and 4 only

Answer

Explanation:
An engagement letter for a statutory audit typically includes the use of internal audit, the use of experts, and the basis of fees, as these are relevant to the scope and terms of the engagement. The number of audit personnel is an internal decision of the audit firm and not typically discussed with the client in the engagement letter. Thus, options 1, 2, and 4 are correct, making D the correct answer.

Tags: Audit Procedures, Engagement Letter, ICAG, Statutory Audit
Level: Level 3

Topic: Practice management

Uploader: Salamat Hamid