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what is an engagement letter this is a document that establishes an understanding between the auditor and the client and it is something that the auditor gives to the client before the audit engagement begins the client needs to sign and acknowledge this agreement before the auditor begins their test work it is a legal document so basically a contract and it can include the following sections the audit objective and scope the responsibilities of the auditor the responsibilities of management the inherent limitations of an audit and it usually includes the fees as well this document is important because it helps prevent scope creep in other words liability issues that can arise from disagreements about fees or payments or additional services that the client asks the auditor to provide any any business situation should be established through terms up front and thats the purpose of the engagement letter to the auditor while large firms have quality procedures in place to ensure that eng
