What is the auditor’s letter of consent?

The Auditor’s letter of consent is the letter that is prepared by the client or management and communicated to the previous or current Auditor (the outgoing) to inform them about the changing of the Auditor of their company.

This letter allows them to provide the information requested by or will be required by the upcoming Auditor (the prospective Auditor).

The company might change its auditor every year, every three years, or sometimes every five years.

It depends on the company policy and regulations in the jurisdiction in which the company operates.

If a client wants to change Auditor, before accepting the engagement with their client, the upcoming Auditor typically requests the client to prepare the letter of content to the current or previous Auditor that they are going to change or have changed the Auditor

The letter also informs the current or previous Auditor that the upcoming Auditor will request or ask for their information.

And if it is the case, then the letter is given them the mandate to provide the information or document to the upcoming.

Normally, the upcoming Auditor will send the professional clearance letter to the previous Auditor.

The information that upcoming auditors want to clarify includes why they are changing and resigning if any, any problem they face during their audit, any reason that upcoming Auditors should not accept the engagement, etc.

What should be included auditor’s letter of consent?

An auditor’s letter of consent typically includes the following information: the name and signature of the auditor, an affirmation that they are qualified to audit the company following applicable standards, a description of their scope of work, a statement that they consent to be named as an auditor in documents filed with regulatory authorities, and any other important details necessary for the auditing process.

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Additionally, in some cases, such as for publicly traded companies or regulated industries, additional requirements may be included in the consent letter.

Conclusion:

When?

Upon the request from prospective Auditors and generally at the pre-accept stage of the audit engagement.

Why?

To mandate an outgoing auditor to respond to the request of the coming auditor. 

Who?

The letter is prepared by the client and sent to the outgoing auditor.