AZ Manufacturing Ltd is an old established family company whose auditor has recently died. You have been asked by the directors to accept appointment as auditors to the company. They have proposed that you should accept appointment as a director of the company and a member of your staff should accept appointment as a secretary of the company.

You are required to state:

1. The preliminary work to be done in consideration of the appointment

2. The steps required to establish firm's appointment as auditors

3. The matters which you feel should be included in a suitable letter of engagement

4. Your response, giving your reasons, to the proposal that you should accept appointment as a director of the company and a member of your staff should accept appointment as a secretary of the company.