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after an auditor is decided to accept a new client or continue with an existing client the auditor needs to formalize that relation through something called an engagement letter the engagement letter is gonna spell out exactly what are the responsibilities of the auditor and what our managements responsibilities as well for example we talk about the engagement objectives which is to perform an audit thats what the auditors doing but management would take responsibility and it would say managements responsibility is the financial statements its not the auditors responsibility the auditor is going to conduct tests in an attempt to determine with reasonable level of assurance whether the financial statements are free from material misstatement whether due to error due to fraud so thats what the auditor is gonna do but ultimately the financial statements are managements responsibility and thats gonna be spelled out in the engagement letter then also the engagement letter is going t