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External Audit Engagement Letter
"I need an External Audit Engagement Letter for my privately-held manufacturing company in Riyadh, with special consideration for our international subsidiaries in UAE and Kuwait, targeting audit completion by March 2025."
1. Addressing and Date: Formal letter heading with recipient's details, including company name, address, and date
2. Introduction: Opening paragraph identifying the purpose of the letter and confirmation of the appointment
3. Scope of Audit: Detailed description of the audit scope, including the financial statements to be audited and the applicable financial reporting framework (IFRS as adopted in Saudi Arabia)
4. Auditor's Responsibilities: Description of the auditor's responsibilities, including conducting the audit in accordance with ISAs as adopted by SOCPA
5. Management's Responsibilities: Outline of management's responsibilities regarding financial statements preparation, internal controls, and providing access to information
6. Reporting Requirements: Description of the expected form and content of the auditor's report
7. Timeline and Deadlines: Expected timeline for the audit process and reporting deadlines
8. Fees and Payment Terms: Details of audit fees, payment schedule, and any additional costs
9. Independence Declaration: Statement confirming the audit firm's independence in accordance with SOCPA requirements
10. Acceptance Terms: Instructions for accepting the engagement and returning signed copies
1. Group Audit Considerations: Required when the entity is part of a group and there are specific considerations regarding group audit requirements
2. Regulatory Compliance: Additional section needed for listed companies to address CMA requirements
3. IT Systems Access: Required when specific IT system access or digital audit procedures need to be outlined
4. Other Services: Include when additional non-audit services are being proposed, ensuring compliance with independence requirements
5. FATCA Compliance: Required for financial institutions or entities subject to FATCA reporting
6. Zakat Considerations: Include for entities subject to Zakat reporting requirements
1. Appendix A - Engagement Team: Details of key team members and their roles in the audit
2. Appendix B - Fee Schedule: Detailed breakdown of fees, including hourly rates and estimated hours
3. Appendix C - Timeline: Detailed audit timeline with key milestones and deadlines
4. Appendix D - Required Information: List of documents and information required from the client
5. Appendix E - Standard Terms and Conditions: Detailed terms and conditions including liability limitations and dispute resolution
6. Appendix F - Independence Confirmations: Detailed independence declarations and any safeguards in place
Authors
Financial Services
Manufacturing
Retail
Technology
Healthcare
Real Estate
Energy
Transportation
Telecommunications
Construction
Education
Professional Services
Mining
Agriculture
Hospitality
Finance
Accounting
Internal Audit
Compliance
Risk Management
Treasury
Legal
Corporate Governance
Executive Management
Board of Directors
Audit Committee
Chief Financial Officer
Financial Controller
Finance Director
Chief Executive Officer
Board Chairman
Audit Committee Chairman
Company Secretary
Treasury Manager
Financial Reporting Manager
Internal Audit Manager
Compliance Officer
Risk Manager
Managing Director
Finance Manager
Accounts Manager
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