Auditor is appointed by shareholders. When an auditor accepts an appointment, he or she enters

into a contractual relationship with the company. The audit engagement letter, agreed to and signed

by the auditor and the client, details some of the duties of an auditor for a company (ISA210).

Required:

(a) Discuss the rationale of making financial audit as mandatory.

(10 marks)

(b) Financial audit can ONLY provide reasonable assurance on the true and fairness of the

financial statements. Discuss.

(7 marks)

(c) Under what circumstances a letter of engagement is re-issued? Provide TWO (2) points to

support your answer.

(2 marks)

(d) Discuss resignation letter of auditors.

(6 marks)

(Total 25 marks)