AU-C Section 210.01-03: Terms of Engagement (Scope and Objectives)

AU-C Section 210.01-03 says:

"Scope of This Section
 
.01 This section addresses the auditor's responsibilities in agreeing upon the terms of the audit engagement with management and, when appropriate, those charged with governance. This includes establishing that certain preconditions for an audit, for which management and, when appropriate, those charged with governance are responsible, are present.Section 220, Quality Control for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards, addresses those aspects of engagement acceptance that are within the control of the auditor. (Ref: par. .A1)
 
Effective Date
 
.02 This section is effective for audits of financial statements for periods ending on or after December 15, 2012.
 
Objective
 
.03 The objective of the auditor is to accept an audit engagement for a new or existing audit client only when the basis upon which it is to be performed has been agreed upon through

1. establishing whether the preconditions for an audit are present and
2. confirming that a common understanding of the terms of the audit engagement exists between the auditor and management and, when appropriate, those charged with governance."

In the subsequent blog posts and videos related to AU-C Section 210, Terms of Engagement, we will gain an understanding of the Auditor's responsibilities for agreeing upon the terms of the audit engagement with management and those charged with governance.  This includes the determination of whether we are able to perform the engagement, as well as the responsibilities of the client's management.

AU-C Section 210 is effective for financial statements with  periods ending on or after December 15, 2012, and it includes the requirements laid out in SAS 122.

The objective of the Auditor in complying with AU-C Section 210 is that the Auditor only accepts an audit engagement when an agreement is in place establishing the preconditions for the audit and confirming the terms of the engagement between the entity's management and the Auditor's firm.

Subsequent blog posts and videos will address the requirements necessary to achieve these objectives.

https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00210.pdf