An auditor who, before the completion of the engagement, is requested to change the engagement to one which provides a lower level of assurance, should consider the appropriateness of doing so.
An engagement letter defines the legal relationship or engagement between a professional firm and its clients. The letter details the terms, conditions, and compensation arrangement of the professional relationship. These letters are commonly required by services firms engaged in tax, audit, finance, consulting, and legal advice.
The audit engagement letter states the terms and conditions of the engagement, principally addressing the scope of the engagement and the terms of compensation for the firm.
A request from the client for the auditor to change the engagement may result from a change in circumstances affecting the need for the service a misunderstanding as to the nature of an audit or related service originally requested or a restriction on the scope of the engagement. Whether imposed by management or caused by circumstances.
The auditor would consider carefully the reason given for the request, particularly the implications of a restriction on the scope of the engagement. Where the terms of the engagement are changed, the auditor and the client should agree to the new terms.
