P, an auditor of SPH Ltd. had conducted the audit for the previous period and is requested to conduct the audit for subsequent period as well. The period of engagement of the audit has not expired and there are no revise

The audit engagement letter should be reviewed every year to ensure that it is up to date but does not need to be reissued every year unless there are changes to the terms of the engagement. The auditor shall obtain a new engagement letter if the scope or context of the assignment changes after initial appointment. The audit engagement letter will be required in the following situations: New Audit Engagement: Covers an audit being conducted first time and therefore the appointment of the Auditor is an initial appointment. It will also cover the situations where the audit for the previous period was conducted by another Auditor. Changes in terms of Audit Engagement: Whenever there is a change in the terms of Audit Engagement in the middle of an ongoing audit, the Auditor shall adhere to the Standard and initiate a revised Engagement Letter in terms of this Standard. Recurring Audit Engagement: Covers the situation where the Auditor had conducted the audit for the previous period and is requested to conduct the audit for the subsequent period as well. In such a case, the Auditor should obtain fresh Audit Engagement Letter if the period of engagement has expired, including revised terms if the circumstances so require. Auditor shall adhere to the Standard even if the Audit Engagement is a continuing one. Conclusion: As there were no revised terms and also the period of engagement has not expired, it is correct to state that for the recurring audit engagement fresh audit engagement letter will not be required. The criteria for declining and withdrawing for an engagement are as follows: Based on the evaluation of client information and the following factors, the auditor should determine and document the conditions beyond which it would be prudent to decline, or withdraw from an engagement: Client's status/information that is likely to impact adversely on the independence of the firm; Ability of the firm to provide appropriate service to the client, considering needs nor technical skills, knowledge of the industry and personnel; Consider circumstances which would cause the firm to regard the engagement as one requiring special attention or presenting unusual risks.