Lesson: Changes in the Terms of an Engagement

This lesson explores the concept of changes in the terms of an engagement, discussing various reasons for such changes and the appropriate steps for an auditor to take in response. Examples of acceptable and unacceptable reasons for changing an engagement are provided, including the classic example of a client switching from an audit to a review due to changing bank requirements. Nick Palazzolo, CPA, highlights the importance of including a statement that a review is substantially less in scope than an audit when making this change. Additionally, the lesson emphasizes the need for auditors to reassess the engagement, consider any additional work required, and evaluate the overall reason behind the change to ensure a proper conduct of the engagement.