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Governance, Risk, Audit & Privacy · Intermediate

Engagement Letter

Document defining an audit or assurance engagement's objectives, scope, responsibilities, and terms.

Definition

Engagement letters are commonly used by external auditors and for specific assignments to confirm mutual understanding with the client. Internal audit relies primarily on the charter but may use engagement memos.

Example

A consulting firm issues an engagement letter to perform a PCI DSS readiness assessment.

Exam tip

Charter is for the internal audit function; engagement letter is for individual engagements, especially external.

Related terms