Which of the following should be included in an audit engagement letter?

Including the scope, objectives, timeline, and responsibilities of both auditors and management in an audit engagement letter is crucial for establishing a clear framework for the audit process. This ensures that all parties are on the same page regarding what the audit aims to achieve, the extent of the audit work, and the responsibilities involved.

The scope defines the boundaries of the audit, identifying what areas will be examined, while the objectives clarify the purpose of the audit and the desired outcomes. Specifying the timeline establishes expectations about when different phases of the audit will occur, aiding in planning and resource allocation. Additionally, outlining the responsibilities of both the auditors and the management ensures accountability and helps facilitate cooperation throughout the audit.

In contrast, while the names of all stakeholders (first option) and a list of regulatory requirements (second option) might be relevant, they are not essential components of an engagement letter. A detailed list of audit findings (fourth option) is also not appropriate in the engagement letter, as findings are typically presented after the audit is conducted, rather than beforehand. Therefore, choice C comprehensively addresses the necessary elements that guide the audit process from inception to conclusion.