Engagement Letters for Assurance and Non Assurance Engagement

Engagement Letters 📄🖋️
Objective:

Understand the purpose, types, and key contents of engagement letters in assurance and non-assurance services.

💡 Key Topics Covered:

1️⃣ Definition of Engagement Letter:

A formal written agreement between an auditor/accountant and a client.

Defines the scope, objectives, responsibilities, and terms of an engagement.

Provides clarity and reduces the risk of misunderstandings or disputes.

2️⃣ Types of Engagements:
Type of Engagement Purpose Examples
Assurance Engagement Provides a level of assurance on financial or non-financial information Statutory audit, review of financial statements
Non-Assurance Engagement Services that do not provide assurance but assist the client with information or analysis Compilation of accounts, agreed-upon procedures, advisory services
3️⃣ Key Contents of Engagement Letters:

Objective and Scope: What the engagement covers

Responsibilities: Duties of both the professional and the client

Limitations: Any restrictions or exclusions

Reporting: Type of report to be issued and form of communication

Fees and Terms: Payment structure and billing arrangements

Confidentiality and Compliance: Professional ethics, data protection, and regulatory adherence

4️⃣ Importance of Engagement Letters:

Clarifies roles and expectations

Protects both client and auditor/accountant legally

Enhances professional relationship and communication

Serves as evidence in case of disputes or legal issues

5️⃣ Practical Example:

Assurance Engagement: An auditor issues an engagement letter to audit a company’s financial statements for the year, outlining responsibilities and scope.

Non-Assurance Engagement: An accountant is hired to compile management accounts without providing an audit opinion.

🎯 Who Should Watch / Study:

Accounting and auditing students

Auditors and accountants preparing professional engagements

Business managers overseeing financial reporting

📘 Learn With Manifested Publishers:

Structured lessons, examples, and exercises to help learners understand engagement letters and their application in both assurance and non-assurance services.

💻 Visit: www.manifestedpublishers.com

📞 Call/WhatsApp: +254 724 173 845

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