Before the audit begins, the auditor performs pre-engagement acceptance or continuance procedures.This includes:
- an independence assessment;
- a pre-engagement assessment; and
- communications with the previous auditor (if applicable).
Throughout this process, you can expect:
- a letter that communicates the auditor’s independence and compliance with relevant professional standards; and
- disclosure of all relationships between the auditor and the entity and its related entities that may affect the auditor’s independence.
Once the pre-engagement assessment is complete, the auditor issues an Engagement Letter with:
- engagement objectives, scope and limitations;
- management's responsibilities;
- responsibility for adjustments;
- the auditor's responsibilities; and
- other matters, such as fees.