A written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal acts is usually set forth in a(n)
A) Client representation letter.
B) Letter of audit inquiry.
C) Management letter.
D) Engagement letter.

Question

Quizplus · Accepted Answer

The written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal acts is documented in the engagement letter, which outlines the terms of the audit engagement. The engagement letter establishes an understanding of the responsibilities of both parties, including the scope of work, the timing of the audit, and the methodology used in the audit. This letter also confirms the agreement of the client to provide full and honest disclosure to the auditor, including any known or suspected illegal acts.

A Written Understanding Between the Auditor and the Client Concerning