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      Question

      An audit engagement letter is primarily issued

      to:
      A The shareholders Correct Answer Incorrect Answer
      B The management of the client Correct Answer Incorrect Answer
      C The stock exchange Correct Answer Incorrect Answer
      D The regulatory authority Correct Answer Incorrect Answer

      Solution

      As per SA 210, the auditor must agree on the terms of the engagement with management or those charged with governance of the client entity, and this agreement is documented in an audit engagement letter addressed to the client management/governance.

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