Where the auditor is carrying out an audit for more than one financial period, he should consider whether circumstances require the terms of engagement to be revised and whether there is need to remind the client of the existing terms of the engagement. The auditor may decide not to send a new engagement letter each period. However, the following factors may make it appropriate to send a new letter;

1. Any indication that the client misunderstands the objective and scope of the audit.

2. Where there are changes to the initial terms of engagement.

3. Where there is a change in senior management or ownership.

4. Where there is a significant change in the nature or size of the client’s business.

5. Changes in legal requirements e.g. if new legal provisions call for a change in the scope of the work.