You will be asked to sign a contract with your auditors and / tax experts. This contract for the provision of services is called the engagement letter.
What is the auditor's engagement letter?
The auditor's engagement letter is effectively the service agreement between your business (company or yourself if you are a sole trader) and the audit and assurance firm. In other words, it’s a contract which stipulates each party’s obligations and responsibilities.
Amongst others the engagement letters include:
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Purposes of the engagement
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The services to be offered + scope of work to be executed
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The agreed fees
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Other requirements that may come into place
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Terms of business (standardised usually) including:
All licensed audit and assurance firms must have an engagement letter signed with their clients. In the event that several services are provided by a single service provider then usually there is a separate engagement letter for each service offering.
Red Alert
If you are not requested to have a signed engagement letter, then you should assess again the professionalism and credibility of your service provider as they are required by their regulators, the local ICPAC, the ICAEW and ACCA to have a signed engagement letter with all their clients.
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