Which of the following statements best represents the reason why auditors prepare engagement letters to be signed by their auditees?

Multiple Choice

1. They provide documentation of managements responsibility for the financial statements.
2. They document the audit fees and deadlines that have been agreed upon.
3. They communicate and clarify the expectations and responsibilities of both the auditee and the auditor.
4. They help to limit auditor liability in the event of misunderstandings.