SSA 210 Terms of Audit Engagements - Singapore

SSA 210 Terms of Audit Engagements - Singapore

Example of an Audit Engagement Letter

To the Board of Directors or the appropriate representative of senior management:

Dear Sirs

We hereby consent pursuant to … (e.g. Section 10 of the Companies Act, Cap. 50) … to act as statutory auditors of your … (e.g. company).

We now set out our understanding of the terms of this engagement. Our audit will be made in accordance with the requirements of … (e.g. Section 207 of the Companies Act, Cap. 50 in the case of companies) with the objective of expressing an opinion of the accounts.

We will conduct our audit in accordance with Singapore Standards on Auditing (SSAs). Those SSAs require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

Because of the test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, there is an unavoidable risk that even some material misstatements may remain undiscovered. Accordingly, our audit should not be relied on to disclose fraud, defalcations or other irregularities. However, if they exist, their disclosure may result from the audit tests we undertake.

In addition to our report on the financial statements, we expect to provide you with a separate letter concerning any material weaknesses in accounting and internal control systems which come to our notice.

We remind you that the Companies Act provides that the responsibility for the preparation of financial statements including adequate disclosure is that of the directors/management. This includes the maintenance of adequate accounting records and internal controls, the selection and application of accounting policies, and the safeguarding of the assets of the company. As part of our audit process, we will request from the directors/management written confirmation concerning representations made to us in connection with the audit.

The Companies Act provides that we shall have a right of access at all times to the accounting and other records including registers of the company, and that we are entitled to such information and explanations as we desire for the purposes of our audit. We look forward to full cooperation with your staff in this connection. Any accounting or other services which we may provide from time to time at your request, are distinct from our functions as auditors.

Our fees, which may be billed as work progresses, are based on the time required by the individuals assigned to the engagement plus direct out-of-pocket expenses. Individual hourly rates vary according to the degree of responsibility involved and the experience and skill required.

This letter will be effective for future years unless it is terminated, amended or superseded. 7 SSA 210 8

Please sign and return the attached copy of this letter to indicate that it is in accordance with your understanding of the arrangements for our audit of the financial statements.

Yours faithfully

XYZ

Partner

Bestar Assurance PAC