Your firm 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 teams assessment of internal control, the control risk is low.

Another team did most of the audit tests and completed most of the audit workpapers. Your team is assigned to complete the workpapers and audit tests of the engagement. Specifically, your team is required to do the following:

1. Write an engagement letter, dated 11/6/2020, by completing WP 2-1

WP 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,