What it is
Engagements change after the letter is signed: the client adds a service, records arrive late, a transaction appears. Firms that handle changes by email or by a conversation tend to find the terms disputed at billing time.
This addendum ties itself to the original letter, shows original and changed terms side by side, gives the reason in neutral wording, states the effect on fees and dates, and has places to record the independence evaluation and, where an audit is being changed to a lower level of service, the justification the standards require.
When to use it
- The client asks for extra work, a different deliverable or a new date.
- Hours will exceed the budget for reasons outside your control and the fee has to move.
- A request to reduce the level of service, for example audit to review, arrives before the work is finished.
What’s inside
- Reference to the original letter and which terms stay in force
- Side-by-side table of scope, deliverables, timeline, fee and staffing
- Reason for the change and its effect on fee and timing
- Optional paragraphs for independence and for a change to a lower level of assurance
- Acceptance block
Standard cited
This template follows AU-C 210 (changes in terms). It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 210 explained.
Questions
Does every change need a signed addendum?
Any change to scope, deliverables, fee or responsibilities should be in writing. A short exchange of emails can work for small items, but a signed addendum is better when the fee changes or the standard that applies changes.
What does AU-C 210 say about reducing the level of service?
If, before the audit is completed, the client asks to change the engagement to one that provides a lower level of assurance, the auditor determines whether there is reasonable justification for the change. The template has a paragraph to record the discussion.
Should the fee change be explained?
Yes. Say what drove it, such as added entities, late records or new transactions, in neutral language. Clients accept explained changes more readily than unexplained ones.
What if work already began on the new scope?
Use the closing sentence option that says work started at the client’s request and the addendum confirms the terms. Note the date it began.
Related templates
- Audit Engagement Letter (AU-C 210)
- Review Engagement Letter (AR-C 90)
- Consulting Services Engagement Letter (CS 100)
- Nonattest Services Independence Evaluation Form
Last updated 11/05/2026. All free templates.