Appointing an external auditor is a crucial step for any organization that values transparency, accountability, and financial integrity.
These professionals provide an independent, objective assessment of your company’s financial statements, ensuring they fairly represent your financial position and comply with relevant accounting standards.
But how do you go about appointing an external auditor? The process starts with a well-crafted letter of appointment.
In this article, we’ll explore 20 sample letters of appointment for external auditors.
These templates will guide you in drafting a clear, comprehensive, and professional letter that effectively communicates your expectations and the terms of the engagement.
So, let’s dive in and see how these letters can help you establish a strong foundation for your auditor-client relationship.
Sample Letters of Appointment of External Auditor
Here are 20 sample letters you can use as a starting point when appointing an external auditor for your organization:
Letter 1: Confirmation of Appointment
Dear [Auditor’s Name],
We are pleased to confirm your appointment as the external auditor for [Company Name] for the financial year ending [Date]. This letter outlines the terms and scope of your engagement.
[Include details about the specific services required, such as auditing financial statements, reviewing internal controls, or providing tax advice.]
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We look forward to working with you.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 2: Request for Proposal
Dear [Auditor’s Name],
[Company Name] is seeking proposals from qualified firms to provide external audit services for the financial year ending [Date]. As a well-respected firm in the industry, we invite you to submit a proposal outlining your qualifications, experience, and proposed fees.
Please include the following information in your proposal:
1. A brief overview of your firm and its experience in auditing companies in our industry
2. Resumes of the key personnel who would be assigned to our engagement
3. Your proposed audit approach and timeline
4. Your fee structure and estimated total cost
Proposals are due by [Date]. We appreciate your interest and look forward to reviewing your submission.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 3: Notification of Selection
Dear [Auditor’s Name],
We are pleased to inform you that [Company Name] has selected [Auditor’s Firm] to serve as our external auditor for the financial year ending [Date]. Your firm’s qualifications, experience, and competitive fees were key factors in our decision.
Please contact us at your earliest convenience to discuss the next steps in formalizing our engagement. We anticipate a productive and successful working relationship.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 4: Engagement Letter
Dear [Auditor’s Name],
This letter confirms the terms of your engagement as the external auditor for [Company Name] for the financial year ending [Date]. The scope of your services will include:
1. Auditing our financial statements by generally accepted auditing standards
2. Reviewing our internal control systems and providing recommendations for improvement
3. Preparing our corporate tax returns
Your fees for these services will be [Amount], billed monthly as work progresses. Any additional services will be billed separately.
Please sign and return the enclosed copy of this letter to confirm your acceptance of these terms. We look forward to a successful audit.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 5: Request for Information
Dear [Auditor’s Name],
As part of your engagement as our external auditor, we request the following information to assist in your audit of our financial statements for the year ending [Date]:
1. A list of all personnel who will be involved in the audit, including their roles and qualifications
2. Your proposed audit plan, including key dates and deliverables
3. A list of any additional information or documentation you will require from us
Please provide this information by [Date] to ensure a smooth and efficient audit process. Don’t hesitate to contact [Name] at [Phone/Email] with any questions.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 6: Confirmation of Audit Schedule
Dear [Auditor’s Name],
This letter confirms the schedule for your upcoming audit of [Company Name]’s financial statements for the year ending [Date]:
– Planning meeting: [Date]
– Interim fieldwork: [Date range]
– Year-end fieldwork: [Date range]
– Draft report delivery: [Date]
– Final report delivery: [Date]
Please let us know if you foresee any conflicts with this schedule. We will ensure that our staff and records are available to you during these periods.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 7: Confirmation of Audit Fee
Dear [Auditor’s Name],
As discussed, your fee for the audit of [Company Name]’s financial statements for the year ending [Date] will be [Amount]. This fee is based on the following assumptions:
1. The audit will be completed by the schedule outlined in our previous correspondence
2. Your staff will have unrestricted access to our records and personnel as needed
3. Our accounting records will be complete and well-organized
Any significant changes to these assumptions may result in additional fees, which will be discussed with you in advance.
Please confirm your agreement with this fee by signing and returning the enclosed copy of this letter.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 8: Request for Additional Services
Dear [Auditor’s Name],
In addition to the audit services outlined in our engagement letter dated [Date], we would like to request the following additional services from your firm:
1. A review of our quarterly financial statements
2. Assistance with the implementation of new accounting software
3. Training for our accounting staff on new tax regulations
Please provide us with a proposal outlining your fees and timeline for these additional services. We believe they will greatly enhance the value of your work for our organization.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 9: Confirmation of Audit Completion
Dear [Auditor’s Name],
We have reviewed the draft of your audit report for [Company Name]’s financial statements for the year ending [Date]. We are pleased to confirm that the report accurately reflects our financial position and complies with all relevant accounting standards.
Please proceed with issuing the final report. We appreciate your diligent work and the valuable insights you have provided throughout the audit process.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 10: Acknowledgment of Audit Findings
Dear [Auditor’s Name],
We have received and reviewed your audit report for [Company Name]’s financial statements for the year ending [Date]. We acknowledge the following key findings:
1. [Finding 1]
2. [Finding 2]
3. [Finding 3]
Our management team is committed to addressing these issues promptly. We will develop an action plan and timeline for implementing your recommendations and will keep you informed of our progress.
Thank you for your thorough work and constructive feedback.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 11: Request for Auditor’s Consent
Dear [Auditor’s Name],
[Company Name] is preparing a registration statement for the issuance of new securities. As our independent auditor, we request your consent to include your audit report for the year ending [Date] in the registration statement.
Please provide your written consent by [Date] to allow adequate time for filing. If you have any concerns or require additional information, please contact [Name] at [Phone/Email].
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 12: Notification of Auditor Change
Dear [Auditor’s Name],
This letter serves as formal notice that [Company Name] has decided to change auditors for the upcoming fiscal year. This decision was made after careful consideration by our Board of Directors and is not a reflection on the quality of your work.
We will initiate a smooth transition to our new auditor, [New Auditor’s Firm], over the next [Number] weeks. Please forward all relevant working papers and files to [Name] at [New Auditor’s Firm] by [Date].
We appreciate your service and professionalism throughout our engagement.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 13: Request for Auditor’s Attendance at Meeting
Dear [Auditor’s Name],
[Company Name]’s Board of Directors requests your attendance at our upcoming meeting on [Date] at [Time] to discuss the findings of your recent audit. Your insights will be valuable as we make important decisions about our financial strategy and operations.
Please confirm your availability for this meeting by [Date]. The meeting will be held at [Location], and we anticipate it will last approximately [Duration].
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 14: Confirmation of Auditor’s Independence
Dear [Auditor’s Name],
As part of our annual governance process, we request confirmation of your firm’s independence with respect to [Company Name]. Please confirm that your firm is independent and in compliance with all relevant ethical and professional standards.
If any matters could potentially impair your independence, please disclose them promptly so we can address them appropriately.
Please provide your written confirmation by [Date]. Thank you for your cooperation in this important matter.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 15: Request for Audit Committee Meeting
Dear [Auditor’s Name],
[Company Name]’s Audit Committee requests your attendance at our next meeting on [Date] at [Time]. The purpose of the meeting is to review the status of the annual audit and discuss any significant issues or concerns.
Please come prepared to discuss the following:
1. Progress of the audit and any anticipated delays
2. Significant audit findings to date
3. Any areas of concern or potential risk
4. Expected timeline for completion of the audit
The meeting will be held at [Location]. Please confirm your attendance by [Date].
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 16: Confirmation of Audit Adjustments
Dear [Auditor’s Name],
We have reviewed the audit adjustments you proposed during your recent audit of [Company Name]’s financial statements for the year ending [Date]. We confirm that we agree with and accept the following adjustments:
1. [Adjustment 1]
2. [Adjustment 2]
3. [Adjustment 3]
Please incorporate these adjustments into the final audited financial statements. We understand that these adjustments will have the following impacts:
– [Impact 1]
– [Impact 2]
– [Impact 3]
If there are any further adjustments or issues we need to discuss, please let us know promptly.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 17: Request for Auditor’s Presentation
Dear [Auditor’s Name],
[Company Name] requests your attendance at our upcoming [Stakeholder Group] meeting on [Date] at [Time] to present the findings of your recent audit. Your presentation will help our stakeholders understand our financial position and any areas for improvement.
Please prepare a [Duration] presentation covering the following key points:
1. Audit opinion and basis for opinion
2. Significant audit findings and their implications
3. Recommendations for strengthening internal controls
4. [Any other specific topics requested by stakeholders]
Please send us a copy of your presentation materials by [Date] for review. The meeting will be held at [Location].
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 18: Confirmation of Management Representation
Dear [Auditor’s Name],
In connection with your audit of [Company Name]’s financial statements for the year ending [Date], we confirm to the best of our knowledge and belief, the following representations:
1. We have made available to you all financial records and related data.
2. There have been no material transactions that have not been properly recorded in the accounting records.
3. We do not know about any fraud or suspected fraud affecting the company.
4. We have complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of non-compliance.
[Include any additional specific representations requested by the auditor]
We understand that your audit was conducted by generally accepted auditing standards and was, therefore, designed primarily to express an opinion on the financial statements and that your tests of the accounting records and other auditing procedures were limited to those you considered necessary for that purpose.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 19: Invitation to Bid for Audit Services
Dear [Auditor’s Name],
[Company Name] invites your firm to submit a bid to provide external audit services for the fiscal year ending [Date]. We are seeking a firm that can provide a high-quality audit while demonstrating a thorough understanding of our business and industry.
Your bid should include the following:
1. An overview of your firm’s qualifications and experience
2. Bios of the key personnel who would be assigned to our engagement
3. Your proposed audit approach and timeline
4. Your fee structure and estimated total cost
5. References from similar clients in our industry
Bids are due by [Date]. We will review all submissions and invite selected firms for in-person presentations. Our goal is to have a new auditor appointed by [Date].
We appreciate your interest and look forward to receiving your bid.
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Letter 20: Termination of Appointment
Dear [Auditor’s Name],
This letter serves as formal notice that [Company Name] is terminating its engagement with [Auditor’s Firm] as our external auditor, effective immediately. This decision was made after careful consideration by our Board of Directors.
Please forward all work papers and other materials related to our engagement to [Name] at [Address]. We also request a final invoice for any outstanding fees.
Thank you for your service. If you have any questions, please contact [Name] at [Phone/Email].
Sincerely,
[Your Name]
[Your Title]
[Company Name]
Wrapping Up the Appointment Process
Appointing an external auditor is a significant decision that requires careful consideration and clear communication.
By using these sample letters as a guide, you can ensure that your appointment process is professional and transparent and sets the stage for a successful auditor-client relationship.
Remember, these letters are just a starting point.
Be sure to tailor them to your specific needs, and don’t hesitate to seek legal advice to ensure they comply with relevant laws and regulations.
With the right approach and a well-crafted letter of appointment, you’ll be well on your way to securing the external audit services your organization needs to thrive.