ICAEW ARF · Chapter 2 · Question 4 of 8
Which of the following would normally be included in an audit engagement letter?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Management's responsibility for preparing the financial statements and for internal control
Explanation
Engagement letters set out the agreed terms, including management's acknowledgement of its responsibilities for the financial statements, internal control and giving access to information. Materiality and sample selections are planning judgements that are not shared in advance, otherwise the audit could become predictable. Deficiencies cannot be known before the audit work is performed.
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