Recently an International Accounting Firm was commissioned to do a forensic audit of a public corporation but ended up saying that what it did was a review instead. There was no evidence that it went back to the client to obtain authority to downgrade the engagement.
My response will not differ in any way to that proffered by Artie. Audit engagement is a contractual one. The proposal to vary the term of an existing contract is a new offer which of course could be rejected by the client. The proposal should be sent to the client for acceptance or otherwise. In addition, the client could decide to determine (terminate) the entire engagement on the basis of this proposal.
Artie is correct. And, of course, the engagement contract will usually be set in the context of legal or similar requirements affecting the entity being audited or reviewed. Those requirements will stipulate what type of engagement is required (eg an annual audit with interim reviews)
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