Your firm, ACTG $307$ & Associates, is engaged to audit the financial statements of XYZ

Corporation. It is a private manufacturing company that is considering going public in three to four

years. Your firm has been preforming audit services to this client for the past five years. The

client requires financial statements audits for monitoring purposes, but mainly to receive finance

and loans from banks. The management team has high level of competence and integrity and

based on the other team's assessment of internal control, the control risk is low.

Another team did most of the audit tests and completed most of the audit work papers $($WP$).$ Your

team is assigned to complete the work papers and audit tests of the engagement. Specifically, your

team is required to do the following:

Write an engagement letter, dated $\frac{11}{6}\frac{?}{2020},$ by completing WP $2-1.$

WWP $2-1$

ACTG $307$ & Associates

Certified Public Accountant

$2500$ Michigan Ave.

Chicago, IL $60000$

Mr$.$ John Smith, Chairman of the Board

$xYZ$ Corporation.

$36$ Bryn Mawr St$.$

Chicago, IL $60625$

Dear Mr$.$ Smith,