Part (bi) for 1 mark required the purpose of an engagement letter and part (bii) for 3 marks required six matters that should be included in an audit engagement letter. This question was answered well by most candidates with many scoring full marks. In addition the verbs of “state” for part (bi) and “list” in part (bii) were addressed by most candidates and answers were generally succinct.

Where candidates did not score full marks this tended to be because in (bi) they repeated points from (bii) or simply stated that “the engagement letter is a contract” and in (bii) they gave irrelevant points such as date, signature of auditor and company’s year end.