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UNDERSTANDING WITH THE CLIENT

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SAS Number 83 provides that the auditor should have a written agreement with the client concerning the engagement services so as to avoid misinterpretation. The understanding should cover such areas as the purposes of the engagement, auditors' responsibilities, management's duties, limitations of the engagement, conditions under which access to the audit workpapers may be granted to others, arrangements involving a predecessor auditor, and use of specialists and internal auditors. The understanding should be documented in the working papers.