audior liablity. Turning into liability - there is a vote at the end of general meeting. But then that is followed by the contract. You enter into the contract with the company. This was set in detail exactly what the obligations are, what the company would do , what the auditors do etc. these are typically under standard in terms of the engagement. If got a reasonable medium sized company making steel pipes for eg, you take a caanz standards agreement and make sure stock are there and all those things etc is no problem. The prob comes when We have got complicated organization like banks, life insurance companies. Or perhaps pension funds as well. Within those, there are financial assumption that have been made by expert with in the organization which isnt open to auditors to question or cto check. Life insurance for eg - the risk life insurance faces are calculated by by actuary . An actuary is a highly specialized profession in terms of assessing risks. To a great extent the auditor cant question what the actuary has decided. In these situation you cant have a standard term of agreement. U got to set out what the role of auditors is and what the role of the actuary is in terms of the audit in order to make it effective