Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A new hire to Ainsley CPA firm, Shanna, is being mentored by Dave, an experienced auditor and CPA. Shanna is about to begin her first

image text in transcribed A new hire to Ainsley CPA firm, Shanna, is being mentored by Dave, an experienced auditor and CPA. Shanna is about to begin her first audit with Dave as her mentor. Dave has spent some time going over what Shanna is likely to see and experience during the first few days of the audit. Shanna asks Dave to explain the idea of an engagement letter, and if this letter is really needed. Dave's most suitable response to this inquiry would be to advise that the engagement letter helps to make sure that the client and the audit are 'on the same page' with respect to important audit details such as the scope and timing of the work, and to help the auditor should the client or any third parties attempt litigation. that the engagement letter that a client reviews and signs prior to the initial audit is more of a formality. The auditor has historically used the engagement letter to clearly lay out the conditions and expectations of the audit, and to ensure that the auditor cannot be sued. that in the electronic era, most auditing firms no longer have their client's sign engagement letters. This is because the amount of documentation generated electronically negates the need for a formal engagement letter. that as a matter of policy, and in adherence to generally accepted auditing standards, an updated engagement letter is required to be signed by the client before any engagement begins. The purpose of this is to make sure the client fully understands what the audit would entail and what exactly will be audited in advance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Good Better Best A Guidebook For Performance Auditing

Authors: Gary Blackmer

1st Edition

131265869X, 978-1312658691

More Books

Students also viewed these Accounting questions

Question

@ describe the system of process costing

Answered: 1 week ago