Preliminary arrangements agreed to by the auditors and the client should be reduced to writing by the auditors. The best place to set forth these arrangements is in:
A) A memorandum to be placed in the permanent section of the auditing working papers.
B) An engagement letter.
C) A client representation letter.
D) A confirmation letter attached to the constructive services letter.

Question

Quizplus · Accepted Answer

The best place to set forth preliminary arrangements agreed to by the auditors and the client is in an engagement letter. This letter sets out the responsibilities of both parties, the scope of the audit, the timeline for completion, and the fee arrangement. It is a formal agreement between the auditors and the client and helps to establish clear expectations and minimize misunderstandings.

Preliminary Arrangements Agreed to by the Auditors and the Client