Publications: Rural Development Audit Program

F:  Engagement Letter

The auditor should prepare a written engagement letter for the audited entity, which clearly sets forth the terms, nature, and limitations of the audit engagement. The engagement letter may include terms and conditions that the auditee and the auditor deem appropriate; however, the following provisions should be included in the audit agreement:

1. A statement that the auditor will perform and document the audit work in accordance with GAGAS and the professional standards of the AICPA;

2. A statement that the auditor will submit the completed audit and accompanying audit letters to the entity's governing body 30 days prior to the date the audit is due to Rural Development;

3. A statement that the auditor will make all audit-related documents, including workpapers, available to Rural Development, OIG, or their duly authorized representatives, upon request; and

4. The auditor will report, in writing, all irregularities, as well as indications of fraud, abuse, or illegal acts, whether material or not, to the entity's governing body, Rural Development, and OIG.

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