Letter of Engagement

Assessment Task 1: Letter of Engagement

Due: 12th March, 2025, 10:00am (morning)

Maximum length/format: Letter format, 1000 words +/- 10% word count acceptable

Task:

This is an individual assignment to prepare a letter of engagement setting out your expectations and the scope, roles and responsibilities and other terms (such as deadlines and ethical conduct) to be agreed upon, before the commencement of your group work research assignment task (AT2). You will work in pairs to complete assignment task 2 (AT2) so it is important to first clearly define your own expectations for a working relationship and to conduct a preliminary scope of the work to be completed for AT2. Auditors undertake similar pre-engagement activities before taking on an audit.

As this is an Auditing assignment you should include a brief evaluation of relevant audit and assurance concepts and principles, as well as an overview of the regulatory and ethical environment to provide a preliminary assessment of the types of risk you will need to research for AT2. This is also your chance to do your own risk assessment before committing to work with a classmate. Once you have submitted your letter of engagement to MyLO it will be a useful tool to find and further negotiate expectations with a suitable team member. See additional guidelines underneath for items to include in the engagement letter.

Use this team contract and submit along with your submission: Team contract - to be submitted with

AT1

NOTE: It is perfectly alright for both team members to submit the same team contract. The point is to ensure that all team members are in agreeance to their agreement.

Detailed Guidelines for preparing the Letter of Engagement (AT1)

Find one of your classmates that you would like to do the assignment with. This is an individual assignment. However, you will need a team mate to do Assignment tasks 2 and 3, which are group based. For me the selected ASX company name is Brambles Ltd

As you would now have a company selected, you can begin drafting the engagement letter for the client for the audit of general purpose financial report (your client will be the company that you have selected in your group). Your engagement letter needs to cover the following information (Note: there are items on the list that may not always be presented in an actual engagement letter, this is for education purposes only).

1. a. The objective and scope of the audit as discussed with the client


2. b. Outline what are the auditors responsibilities in the clients context including links to issues outlined by the past auditor.


3. Your assessment of the issues and risks that may impact this years audit you could apply preliminary SWOT analysis or PEST analysis and include this in the engagement letter (this has to be client specific data, including research to support why scoping of audit is important and then applying it to the clients case to show how this will be applied to the client)


4. The SWOT or PEST analysis must also identify relevant social and environmental risks using the Sustainable Development Goals as a foundation of assessing these risks.


5. The letter must outline the strengths and weaknesses of conducting financial statement audit.


6. Provide a sound and convincing justification of auditing the client using theory by applying one of the three hypotheses.


7. How will the results of this audit engagement be communicated?

Things to note

Since this is an individual assignment, each group member will submit individual engagement letter although you are working on the same company. Please remember who your target audience is for this letter. A letter of engagement is usually sent in exploring the relationship that auditors have with the client and their Board. Please write this letter keeping the audience in mind.

Conducting research is critical in this assignment. Apart from your textbook and the company information available online, please note that you must conduct additional academic research to support your need for scoping out the audit work required and for planning the audit and for research into the theories of auditing.

Please note that you must produce work that is your own and can pass through Turnitin.

Referencing: Please note a professional engagement letter does not have refences. But since this is an academic assessment task, you will use academic referencing. Please use APA7 referencing style for both in-text references and reference list. See library guide on APA7 referencing guide.

Use of Generative Artificial Intelligence (GenAI), For your Assessment Task 1 - The use of GenAI is not permitted.

How your work will be assessed:

This assessment is worth 10% of the final grade for this unit. The assessment will be graded out of 100 points according to the marking criteria. Please ensure you have followed the instructions and have included all the relevant parts. The rubric shows the distribution of marks and performance expectations, and should be read carefully before starting the assignment. Some elements may be weighted more highly than others. Carefully review what each criterion is asking you to do, and what is required for each level of the rubric (High Distinction, Distinction, Credit, Pass, or Fail).

For marking Rubric follow the Marking Rubric File

The feedback on this assessment will be provided using the rubric, so please familiarize yourself with the rubric.

File type required: Word format. You will submit two (2) files

1.) Letter of engagement for your case study company

2.) Your Team Contract

Checklist before Submission: Before submitting your assignment, ensure you've:

• Carefully read the Task Description, and raised any questions with your Unit Coordinator;


• Reviewed the marking rubric;


• Included the team contract.