The auditor shall agree the terms of the audit engagement with management or those charged with governance, as appropriate. The agreed terms of the…

(a) The audit engagement letter is sent by the auditor to his client. It is in the interest of both the auditor and the client to issue an engagement letter so that the possibility of misunderstanding is reduced to a great extent. Such a letter includes: (a) The objective and scope of the audit of the financial statements (b) The responsibilities of the auditor (c) The responsibilities of management (d) Identification of the applicable financial reporting framework for the preparation of the financial statements and (e) Reference to the expected form and content of any reports to be issued by the auditor and a statement that there may be circumstances in which a report may differ from its expected form and content.