A request from the client to the statutory auditor to change the undertaking may result from a change in circumstances affecting the need for service, a misunderstanding as to the nature of an initially requested review or related service, or a limitation of the size of the undertaking, whether caused by management or by circumstances. The review letter can simply be characterized as a service agreement between the statutory auditor and the company, which is a formality to be finalized to ensure that the company is able to maximize its results in order to achieve optimal results. The letter of commitment documents and confirms the acceptance of the designation by the statutory auditor, the purpose and scope of the audit, the extent of the legal auditor`s responsibilities to the client and the form of the potential reports. If a legal auditor is not independent of a client, this can lead to non-compliance with ethical requirements and bad publicity. When a statutory account controller is associated with a client who does not have integrity or the legal auditor does not have the capacity and competence to perform the audit, the risk of significant misrepresentation and non-detection by the account controller increases. The address to which you send the letter of commitment depends on the type of business unit. If you work with a company, go to the Board of Directors. If your client is a small company that does not have a board of directors, send the letter to the CEO. If you control an individual business, contact the owner.
Talk to partners for a partnership unit. The letter of commitment is signed by your CPA company, for example. B Smith and Jones. It can also be signed by the company`s contact person, for example.B. «Joe Smith, partner.» The engagement letter also has a place where the client can sign, while acknowledging that he accepts the terms of the letter. The content of a letter of commitment is determined with the requirements of each client in mind, but each of these letters would generally cover the following points: the letter of review is therefore proof that the statutory auditor must deal with the agreed audit elements, in order to enable them to achieve better results. It is in the interest of the adjudicating entity and the auditor to send a letter of commitment, preferably before the engagement begins, to avoid any misunderstanding as to the commitment. This is a very important part, as it helps to create a favorable communication channel between the two parties, so that there will be no gaps in expectations in the near future. Responsibilities of the legal auditor: These also vary. For the final review, it is your responsibility to conduct the review in accordance with GAAS.