Audit engagement refers to audit performed by an auditor. It is the very first stage of an audit procedure where the client is notified by the auditor that the work pertaining to audit has been accepted by him/her and also provides clarifications with regard to the scope and purpose of audit. To be more specific, audit engagement can be referred to the written letter that the auditor uses to notify the client that he/she would be engaging in auditing services. Thus, the audit engagement procedure is basically a negotiation based on professional terms that takes place between prospective customer and a public accounting entity. This procedure is used for finding new customers and offer accounting related services to different businesses.
The auditor uses the term ‘audit engagement’ when the entity has to undergo the auditing procedure. This could imply varied things and therefore it is necessary that the auditor clarifies what she/he exactly means by the term. Irrespective of the definition followed by the auditor, he/she makes it a point to follow certain specific guidelines and procedure for offering the services.
Full EngagementAudit engagement consists of several steps that basically revolve around planning, substantiation, control testing and finalization. The very first step involves providing a letter to the client reminding him about the audit. Once the client has been contacts, both the auditor and client meet with each other to determine how, why and when the auditing would take place. In addition to this, the client also needs to provide the auditor with relevant resources for conducting the procedure smoothly. Following this, the auditor carries out surveys to find out more about the organization and its controls. This is followed by testing of controls and garnering of as much detail and information as is possible. On the basis of the results and information, the auditor prepares a temporary draft and shares the same with client. Once the client has gone through the draft report, he responds to the recommendations and findings made in it. After this, the auditor prepares a final audit report and may also request the client to fill a survey form to better understand his/her performance. The audit is completed after a follow up meeting with client, which usually happens within 6 months.