SA 210 — Agreeing the Terms of Audit Engagements

Issued by ICAI AASB · General

The engagement letter — what it must cover, how it gets accepted, and when terms get changed.

Objective

To accept or continue an audit engagement only when the basis upon which it is to be performed has been agreed, by establishing whether the preconditions for an audit are present and confirming a common understanding of the terms.

Key requirements

Preconditions: management's use of an acceptable FR framework + acknowledgement of management's responsibilities
Written engagement letter agreed with management / TCWG
Terms cover: objective and scope, auditor's responsibilities, management's responsibilities, form of report
Changes to the terms require fresh acceptance and documentation
For recurring engagements, no need to re-issue annually unless circumstances change

Typical procedures

Issue engagement letter referencing SA 210 illustrative format
Obtain management acknowledgement of Section 134(5) responsibilities
Reconfirm independence prior to acceptance

Common pitfalls

Engagement letter missing fee and billing terms
No clear statement on form of the auditor's report (SA 700/701/705/706)
Failing to document changes mid-engagement

On CORAA

Generate an SA 210-compliant engagement letter — letterhead pre-stamped, Word in one click. Open the matching module →

SA 210 in practice

SA 210 sits in the General phase of the audit. The Standards on Auditing are issued by the ICAI Auditing and Assurance Standards Board (AASB) and deemed to be prescribed by the Central Government under Section 143(10) of the Companies Act 2013. Compliance with SAs is mandatory for every audit conducted by a Chartered Accountant in India.

For authoritative text, refer to the ICAI AASB Compendium of Standards on Auditing at icai.org.

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SA 200 — Overall Objectives of the Independent Auditor

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SA 230 — Audit Documentation