Agreeing the scope and terms of the engagement

In this lesson

1. 0:00 Engagement letters: purpose and annual review
2. 0:59 Mandatory contents of engagement letters
3. 1:37 Additional optional elements to include
4. 3:08 Refill Co tender scenario overview
5. 4:12 Key considerations before submitting tender
6. 5:23 Assessing competence and industry expertise
7. 6:28 Independence and fee evaluation

About this lesson

You'll discover the mandatory contents of an engagement letter—including audit objectives, the responsibilities of both auditors and management, the applicable financial reporting framework, and the expected format of the audit report—alongside optional elements like fees, timelines, and management representation letters. Through a practical scenario involving Refill Co., you'll explore the critical factors auditors must assess when tendering for work, including the reasons for previous auditor resignation, your firm's industry competence and available resources, client integrity and independence threats, and whether the engagement is economically viable. This knowledge is essential for the Audit and Assurance module and reflects real-world practice in managing audit relationships professionally and ethically.

Duration: 7m