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The Accounting Review Engagement Letter is a crucial document used in South African professional practice when an accounting firm is engaged to perform a review of a client's financial statements. It is required by professional standards and regulatory bodies, including IRBA and SAICA, and must comply with ISRE 2400 requirements. This document is typically used when a full audit is not required by law or when stakeholders need a lower level of assurance than an audit. The letter establishes the engagement's parameters, including scope, limitations, responsibilities, and deliverables, while ensuring compliance with South African regulatory requirements including the Companies Act, POPIA, and relevant professional standards. It serves as the foundation of the professional relationship and helps prevent misunderstandings about the nature and limitations of the review engagement.

1. Addressee and Introduction: Formal letter heading, client details, and introductory paragraph thanking for the engagement opportunity

2. Purpose of Engagement: Clear statement of the review engagement purpose and the periods/financial statements to be reviewed

3. Scope of Review: Detailed explanation of what a review engagement entails and its limitations compared to an audit

4. Professional Standards: Reference to ISRE 2400 and other applicable professional standards governing the review

5. Management Responsibilities: Clear outline of management's responsibilities for financial statements and internal controls

6. Practitioner's Responsibilities: Description of the accounting firm's responsibilities and the nature of procedures to be performed

7. Independence and Ethics: Statement of compliance with ethical requirements and independence standards

8. Reporting: Description of the expected form and content of the review report

9. Timeline and Deadlines: Expected timeframes for the review and report delivery

10. Fees and Billing: Fee structure, payment terms, and billing arrangements

11. Limitation of Liability: Terms limiting the practitioner's liability within legal bounds

12. Confidentiality and Data Protection: POPIA compliance and confidentiality commitments

13. Acknowledgment and Acceptance: Space for client signature and date of acceptance