B. Auditor realizes not independent. The auditor should withdraw from the engagement. An audit engagement occurs when a client employs an accountant to perform an audit of the company's financial records. I think understanding the nature of audits and understanding how that relationship works is very important to making your audit a successful engagement. Viewing 1 post (of 1 total) You must be logged in to reply to this topic. The auditor will generally issue a qualified report or disclaim an opinion. Management refuses to grant permission to communicate with predecessor auditor. ... the auditor considers seeking legal advice when deciding whether to withdraw from an engagement and in determining an appropriate course of action. The auditor must also determine whether there is a professional or legal requirement to report to the person(s) who made the audit appointment or, in some cases, to regulatory authorities, the auditor’s withdrawal from the engagement and the reasons for the withdrawal. The process follows a number of steps. If a company is combative or argumentative with us through the audit, if it puts that undue stress on the auditor to where they can’t be objective, then we have to withdraw from that engagement. What happens if Auditor Unable to Complete the Engagement? If the auditor concludes that no reasonable justification for a change of the terms of the audit engagement exists and is not permitted by management to continue the original audit engagement, the auditor should: Withdraw from the audit engagement when possible under applicable law or regulation. To create the engagement, the accountant and client will agree the scope and duration of the audit before substantive audit planning begins. Management won't sign engagement letter. An auditor decides to issue a qualified opinion on an entity's financial statements because a major inadequacy in the entity's electronic accounting records prevents the auditor from applying necessary procedures. Situations where auditor would withdraw from engagement: Management integrity. Posts. What else? ... in some cases, to regulatory authorities, the auditor’s withdrawal from the engagement and the reasons for the withdrawal. leading to withdrawal/resignation from an existing engagement, auditor’s responsibilities and professional obligations to be complied with by an auditor in resigning or withdrawing from an engagement to audit financial statements. Author.