SA 210 (Revised)

The Auditor’s responsibilities in agreeing

the ‘terms of audit engagement with
the Management/TCWG.
Note:
i. This SA applies only to audit engagements of
financial statements.
ii. Management includes TCWG.
iii. Where the scope and objectives of audit and
the auditor’s responsibilities are laid down in
any applicable statute the role of the
Engagement Letter will be merely informative.
To accept/continue audit
engagement only when:
a) The PRECONDITIONS for an audit
are met, and
b) Confirming that there is COMMON
UNDERSTANDING between the
Auditor and the Management with
regard to the ‘Terms of Audit
Engagement’.
1) The Financial Reporting Framework (FRF) applied
in the preparation of the financial statements (FS)
is acceptable.
2) Acknowledgement received from the management
that it understands its responsibilities regarding:
i. Preparation of FS according to applicable FRF, including
fair presentation.
ii. For such internal controls as is required so that the FS
are free from misstatements due to frauds and errors.
3) Provide the auditor with:
i. Access to information. (Records, documents and other
matters.)
ii. Additional Information required by the auditor.
iii. Unrestricted access to persons within the entity.
4) There has been no ‘Limitation to Scope prior to
Accepting the Audit Engagement’.
If the management/TCWG impose a
limitation on the scope of the auditor’s
work in terms of a proposed terms of
engagement such that the auditor
believes that the limitation will result in
the auditor disclaiming an opinion on the
financial statements, the auditor shall not
accept such a limited engagement as an
audit engagement, unless required by law
or regulation to do so.
The auditor and the management shall agree the terms of
audit engagement and record the same in an ‘audit
engagement letter’ or other suitable form of written
agreement.
Any such letter should mention the following:
 Objective of Audit of FS.
 Management’s responsibility re: FS.
 Management’s responsibility re:
i. Selection of appropriate accounting policies.
ii. Consistent application of those accounting
policies.
iii. Preparation of FS on going concern basis.
iv. Maintenance of adequate accounting records.
v. Written Representations by Management.
vi. Arrangements concerning involvement of
internal auditors and other staff of the client.