From the Professional Standards, AU 311, paragraph 8:

"The auditor should establish an understanding with the client regarding the services to be performed for each engagement and should document the understanding through a written communication with the client."

should and should

Does should = required? I thought must = required...

Does should mean do it unless the auditor/accountant can use other means?

I went cruzing through the book and found it specifically addressed.

For compilation engagement: generally recommended, required if no report issued.  Representation letter: not required

For review engagement: recommended  Representation letter: required

For audit engagement: required in most circumstance  Representation letter: required

Conclusion:  engagement letter not always required.  Representation letter is absolutely required for and issuers and non-issuer's audits and reviews.

Thanks for asking the question.  It clarified one item for me.

I use Wiley to supplement Becker, kind of like a security blanket I guess.  I'm always careful when I read Wiley.  I find contridictions between the 2, and I always stay with Becker.  I think there are errors in Wiley.  But you can log onto Wiley and get updates/corrections.  I've seen Nan L. post the web site for this in this forum.  If you are using Wiley only, I would definately log on and print off thier corrections/clarifications.