Final answer:
An engagement letter outlines the agreement between a professional firm and its client, but it does not include a list of adjusting journal entries. This document will generally list additional services, information about audit fees, and arrangements for specialists.
Step-by-step explanation:
The subject of the question pertains to engagement letters which are formal agreements between a professional firm and its client, particularly within the context of accounting and audit services. An engagement letter typically outlines the scope of the work, the responsibilities of each party, the timeframe of the services, and other related terms including fees for the services provided.
Engagement letters include all of the following except: B. A list of adjusting journal entries. This is because an engagement letter is supposed to define the terms and conditions of the engagement between the auditor or the service provider and the client — not to list specific accounting entries or detailed operations such as adjusting journal entries. These entries are typically the outcome of audit processes rather than items to be listed in the initial engagement agreement.
The letter usually includes:
- A list of additional services that will be provided (Option A).
- Information about the audit fee (Option C).
- Arrangements involving the use of specialists (Option D).