Prepare an engagement letter
i. Use the template provided to complete the engagement letter for ReAL Co.
ii. Attach the completed letter to the workpaper file.
Assume the following additional information for inclusion in the letter where appropriate:
Audit fee is based on an estimate of hours required to conduct the audit. Fees are estimated to be $41,200 which is a 3% increase over the prior year’s fee. Fees will be billed half way through the audit with an interim instalment, and a final instalment after the audit is complete. The Company and its staff may also receive further communication from the Audit Manager at the commencement of the planning and final audit phases in relation to audit’s requirements and the timing of testing.
The purpose of the audit is to provide an opinion on the general purpose financial reporting statements prepared by the Company. It is the Company’s responsibility to advise our firm of any additional financial statements are required to be audited for controlled entities of the Company. Reporting requirements mandate that the Company must give the prepared financial statements to the Audit Partner by a date agreed to allow the audit to completed within legislative timeframes. The Audit Manager will liaise with your staff to formally agree an appropriate date. Any audit findings raised will be discussed progressively with your staff with a view to early response and resolution of issues. At times written responses may be requested.