Engagement Letter For Statutory Audit Template for India

The Engagement Letter For Statutory Audit is a mandatory document required under Indian law and professional standards before commencing any statutory audit engagement. It serves as the formal contract between the appointed auditor and the company, establishing clear terms of reference for the audit engagement. The letter must comply with SA 210 issued by ICAI and relevant provisions of the Companies Act, 2013. It is typically issued after the auditor's appointment is approved by shareholders and should be in place before the audit work begins. The document includes crucial elements such as audit scope, responsibilities, reporting requirements, timelines, and fee arrangements, ensuring both parties have a clear understanding of the engagement terms and their respective obligations.

1. Letter Header: Auditor's letterhead, date, and addressee details (including proper designation of the client representative)

2. Opening Paragraph: Confirmation of the appointment as statutory auditors and reference to the appointment letter/board resolution

3. Audit Scope: Clear description of the scope of statutory audit, including the applicable financial reporting framework and relevant accounting standards

4. Management's Responsibilities: Detailed outline of management's responsibilities for financial statements, internal controls, and providing access to information

5. Auditor's Responsibilities: Clear description of auditor's responsibilities, including conducting the audit in accordance with SAs and communication requirements

6. Reporting Requirements: Format and content of reports to be issued, including main audit report and any supplementary reports

7. Timeline and Deadlines: Key dates and deadlines for the audit process and report submission

8. Fee Arrangements: Audit fees, payment terms, and out-of-pocket expenses

9. Closing and Acknowledgment: Request for acknowledgment and acceptance of terms, signature blocks