Good Morning
I have an new auditor wanting to see an audit file from the previous year. Clearly there needs to be some form of hold harmless letter to be prepared but a search of the internet has not found anything.
Who is to produce this letter and is there anything I can produce on the firm's letterhead in advance of the meeting.
I also have a file with some preliminary notes for the year that they are auditing although nothing was signed off or reviewed I presume they have no right to see those files within their review.
Any help or links would be gratefully appreciated.
Kind regards
David
Replies (9)
Please login or register to join the discussion.
First things first
Have you considered whether you should be making the files available at all?
I no longer do audits, but when I did the firm's policy, and that of all other firms as far as I am aware, was not to make audit files available to outsiders - hold harmless letters or not.
Now has to be provided
Have you considered whether you should be making the files available at all?
I no longer do audits, but when I did the firm's policy, and that of all other firms as far as I am aware, was not to make audit files available to outsiders - hold harmless letters or not.
The law on this has changed and predecessor auditors are now required to make available 'relevant information'. See ICAEW TECH 01/08 for more info.
Que ?
For the less enlightened (and that includes me), could someone explain what a hold harmless letter is and why it is so called.
Thank you.
Try your old friend GOOGLE this is what I found
Definition of 'Hold Harmless Clause'
A statement in a legal contract stating that an individual or organization is not liable for any injuries or damages caused to the individual signing the contract. An individual may be asked to sign a hold harmless agreement when undertaking an activity that involves risk for which the enabling entity does not want to be legally or financially responsible.
Also known as hold harmless provision.
I am aware of Tech 01/08, but it falls well short of requiring access to everything. It is about responding to specific, relevant and reasonable requests.
What I am querying here is granting a successor auditor unfettered access to an entire file. I do not mean to suggest that the outgoing auditor does not have a duty to respond to any specific and reasonable requests from a successor.
It's normal these days for the successor firm to request (in the format prescribed in AAF 01/08) to come and see the whole audit file for the previous year (and maybe the one before that too). Such a request cannot be refused - AAF 01/08 also sets out the format of the reply from the existing auditor (effectively the hold harmless letter).
P.S.
I always add a paragraph to the reply to the successor firm's letter asking them to confirm in writing their acceptance of the terms included in my reply. So we have the successor's request letter, my reply (both in the laid down format), and then the successor's written acceptance of terms of access.