AU-C Section 210.13: Recurring Audits

AU-C Section 210.13 says:

"On recurring audits, the auditor should assess whether circumstances require the terms of the audit engagement to be revised. If the auditor concludes that the terms of the preceding engagement need not be revised for the current engagement, the auditor should remind management of the terms of the engagement, and the reminder should be documented."

A recurring audit engagement is an audit engagement for an existing audit client for whom the auditor performed the preceding audit.  Each year the Auditor performs the engagement he should determine whether the terms of the engagement should be revised.  Typical factors that weigh into his decision might be:

• Any indication that management misunderstands the objective
  and scope of the audit
• Any revised or special terms of the audit engagement
• A change of senior management
• A significant change in ownership
• A significant change in the nature or size of the entity's business
• A change in legal or regulatory requirements
• A change in the financial reporting framework adopted in the
  preparation of the financial statements
• A change in other reporting requirements

If there are no changes to the terms of the engagement, the auditor should remind the client what the terms are, in either written or oral form.  If orally, the Auditor should document with whom the discussion took place, when, and the significant points discussed.

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