3 Planning preliminary considerations

1.4Terms of engagement

We agree the terms of engagement with the client in writing. This is achieved by way of a letter of engagement which must be obtained for all engagements. The client should be asked to confirm agreement with the terms of the engagement in writing.	210.9-12
The letter must confirm our acceptance of the appointment and set out clearly our responsibilities as auditor, the responsibilities of management / those charged with governance, the scope of the engagement and the form of any report. If we accept other responsibilities such as accounts preparation or taxation these should be separately set out within the appendices to the letter. Alternatively, a separate letter should be obtained for our non-audit activities.
An example audit engagement letter is included as an appendix to ISA 210. However, it is important to note that this will need to be amended to include any requirements arising from local statute, regulation or other requirements.
Where the firm is not required to communicate key audit matters in accordance with ISA 701, we consider whether to make reference to the possibility of communicating key audit matters in the auditor’s report in the terms of the audit engagement.	210.A23
Agreeing engagement terms electronically We may evidence acceptance and agreement of our engagement terms on paper (bearing ink signatures) or by electronic means, such as an electronically-signed Portable Document Format (‘PDF’) document or an email containing our engagement terms. If we opt to use electronic means, we ensure that appropriate records of the terms and their acceptance are retained and confirm that (where relevant) the client recipient with whom e-mails are exchanged is legitimate and suitably authorised to act for their corporate body.