Email template
Audit engagement letter email for AU-C 210
AU-C 210, Terms of Engagement, governs agreeing audit terms with a client. The AICPA confirms SAS No. 147 revised it for predecessor-auditor inquiries. Paragraph wording was not checked here, so the element list is firm practice; compare it with your licensed copy.
When to use it
Send after the firm accepts the audit and confirms the preconditions, before planning requests go out. If the client came from another firm, finish the predecessor auditor inquiry first. On a recurring audit, reissue when anything has changed.
Audit engagement letter for [client_name], year ending [period_end_date]
Hi [client_name_contact],
Attached are the terms of our audit of [client_name] for the year ending [period_end_date]. Please sign and return them by [signature_due_date]. Planning requests and fieldwork wait until we hold the signed copy, and the signer should be [signer_title], the person who can bind [client_name] to these terms.
Objective and scope. We will audit the [financial_statement_list] of [client_name], with the related notes, as of and for the year ending [period_end_date]. The audit is meant to give us a basis to opine on whether those statements are presented fairly, in all material respects, in accordance with [framework_name, for example U.S. generally accepted accounting principles]. Supplementary information in scope: [supplementary_information, or write: none].
Our responsibilities. We will perform the audit under U.S. generally accepted auditing standards. That means we plan and perform procedures to obtain reasonable assurance about whether the statements are free of material misstatement, whether from fraud or error. Reasonable assurance is high, but it is not a guarantee: because of the nature of audit evidence and the limits of internal control, a properly performed audit can still miss a material misstatement. We will report to you any significant deficiencies and material weaknesses in internal control that we identify, and other matters we are required to communicate to those charged with governance.
Your responsibilities. By signing, management confirms that it is responsible for: (1) preparing and fairly presenting the financial statements in accordance with [framework_name]; (2) the internal control it determines is needed so the statements are free of material misstatement, whether from fraud or error; (3) giving us access to all information of which management is aware that is relevant to the statements, such as records and documentation; (4) giving us any additional information we request; (5) unrestricted access to the people at [client_name] from whom we decide we need evidence; and (6) written representations at the end of the audit, on the matters listed in our request.
Our report. We expect to issue a written report with our opinion on the financial statements. Findings during the audit can change that: if we conclude the statements contain a material misstatement, we would issue a qualified or adverse opinion, and if we cannot obtain enough evidence we would issue a qualified opinion or disclaim an opinion. As an example, if [client_name] carries inventory we cannot count or otherwise verify, our report could read: "In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section, the financial statements present fairly, in all material respects..." We will discuss any modification with you before we issue the report. Reports we expect to issue: [report_list].
Timing. Planning begins [planning_start_date] and fieldwork is scheduled for [fieldwork_dates]. The attached request list marks priority items, due [pbc_priority_date], and the remainder, due [pbc_final_date]. Our target report date is [target_report_date], which depends on those items arriving and on closing entries being posted by [close_date]. If items are late, we will tell you the revised report date as soon as we know it.
Fees. Our fee is [fee_basis, for example a fixed fee of [amount] for the audit, billed in installments on [billing_dates]]. The fee assumes [fee_assumptions, for example a trial balance that agrees to the general ledger and schedules ready on the agreed dates]. If scope changes or late items need extra time, we will agree the change with you in writing before we bill for it.
Other services. We will also [non_attest_services, for example prepare the draft financial statements from your trial balance, or write: perform no other services]. Management remains responsible for those items, must review and approve them, and must name someone with suitable skill, knowledge or experience to oversee them. That person is [oversight_person_name_and_title].
Records and confidentiality. Our working papers remain our property. We will keep your information confidential and release it only with your consent or where law or professional standards require. [Add retention period, subpoena or peer review language from your firm's standard terms.]
If these terms work for you, sign below and return the letter. Questions before then can come to me directly at [preparer_phone], and we can walk through any paragraph on a call.
Thank you, [preparer_name] [firm_name] Acknowledged and agreed: [signer_name], [signer_title], [client_name] Date: [signature_date]
Replace the placeholders in braces with the client's details. Keep the client's tax ID or account number out of the email.
Notes before you send
- Separate verified from practice. AICPA pages confirm AU-C 210 and the SAS No. 147 revision. Which items the letter must contain needs your licensed copy; note the paragraph beside each section once confirmed.
- Write the framework precisely, such as "U.S. generally accepted accounting principles" or the cash basis, and keep it identical in the letter, request list and draft report. Mismatches force report redrafts.
- On a recurring audit, file a short memo each year on whether terms changed. Reissue if management, ownership, scope, framework or a debt covenant changed; otherwise record that you checked.
- If you prepare the trial balance or draft statements, say so, name the management oversight person and file your independence evaluation first. Do not take a signature from a bookkeeper who cannot bind the entity.
Questions about this template
What does AU-C 210 cover?
AU-C 210, Terms of Engagement, is in the AICPA's AU-C 200 series, General Principles and Responsibilities. It deals with agreeing the terms of an audit with the client. The list of items in this template follows common practice; confirm the exact required content in the standard before relying on it.
Did anything change recently in AU-C 210?
SAS No. 147, published June 6, 2022, narrowly revised AU-C 210 so that, once management authorizes the predecessor auditor to respond, the auditor makes further inquiries of that predecessor. AICPA also publishes a list of AU-C changes for May to August 2026. That page did not say whether AU-C 210 is affected, so open the list and check.
Who should sign the audit engagement letter?
Management signs, or those charged with governance where appropriate. For a small company that is usually the owner or chief executive. For a nonprofit it is commonly the executive director, and many firms ask the board chair or audit committee to acknowledge it. This is practice guidance, not a quoted requirement.
Do we need a new engagement letter every year?
Many firms issue a fresh letter each year because management, fees, deadlines and the report list change. If you skip it on a recurring audit, document the decision in the file. Confirm the exact wording AU-C 210 uses for recurring audits in your licensed copy before you write your policy.