The audit is basically an agreement between the auditor and the organization . Therefore the terms and conditions of audit must be signed by both parties. The documents contains the terms and condition of audit is known as Audit Engagement letter.
The important clauses of this agreement are as under
- The purpose of the audit
- Scope of the audit
- Roles and responsibilities of Auditor
- Roles and responsibilities of the entity
- forma and content of audit report
- Deadlines for completion and audit report issuance
- Applicable accounting system in the organization
The above mentioned terms are agreed in writing and any subsequent change is also recorded in writing if such change is acceptable to both parties.
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