New Audit Engagement Letter Template for Malaysia

A New Audit Engagement Letter is a crucial document required at the commencement of any new statutory audit relationship in Malaysia. This document is mandatory under Malaysian Approved Standards on Auditing (ISA 210) and must be issued before beginning any audit work. The letter establishes the fundamental terms of the audit engagement, including scope, responsibilities, timelines, and fee arrangements. It serves as a legally binding document that protects both the audit firm and the client by clearly defining expectations and deliverables. The letter must incorporate specific requirements from the Companies Act 2016, the Malaysian Institute of Accountants' By-Laws, and other relevant Malaysian regulations, particularly when dealing with public listed companies or regulated industries. This New Audit Engagement Letter is especially important as it forms the basis for the ongoing auditor-client relationship and sets the framework for all future audit work.

1. Addressing and Salutation: Proper addressing to the appropriate governance personnel (e.g., Board of Directors, Audit Committee) of the client company

2. Introduction: Purpose of the letter and confirmation of the appointment as auditors

3. Audit Scope: Clear definition of the audit scope, including the financial statements to be audited and the period covered

4. Objective of the Audit: Statement of the audit's objective to express an opinion on the financial statements

5. Responsibilities of the Auditor: Detailed outline of the auditor's responsibilities, including conducting the audit in accordance with ISAs and ethical requirements

6. Responsibilities of Management: Clear statement of management's responsibilities for financial statements, internal controls, and providing access to information

7. Audit Process and Limitations: Overview of the audit process, inherent limitations, and risk assessment procedures

8. Reporting Requirements: Format, content, and timing of the audit report and other communication requirements

9. Fee Arrangements: Audit fees, payment terms, and basis for fee calculation

10. Timeline: Expected timeline for the audit and key deliverables

11. Confirmation and Acceptance: Request for acknowledgment and acceptance of the terms