The following audit engagement letter was drafted by D. Minus, a new staff assistant.

This will confirm our arrangements with you to express an unqualified opinion on the financial statements of Lurch Enterprises for the year 19X4. We will do a thorough review of the balance sheet at December 31, 19X4, and the related statements of income and cash flow for the year then ending in accordance with generally accepted auditing procedures. This requires that we plan and perform the work to obtain a high degree of assurance about whether the financial statements are correct. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We intend to assess the company's existing internal control to see if it is adequate to prevent errors. Any errors not prevented by your internal control will be detected by our audit.
The charges for our services will be contingent upon how many hours we spend, which, in turn, is contingent upon the size of your company.
We appreciate this opportunity to provide you with the most outstanding auditing services available in this country.
Sincerely, D. Minus Staff Assistant Required:
Identify the deficiencies in this audit engagement letter.

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Ms. Patty Huff, Controller Lurch Enterprises 1481 Big Mountain Road Evening Shade, Arkansas Dear Ms. Huff: