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The Internal Audit Engagement Letter serves as a crucial governance document for organizations operating in the United Arab Emirates, establishing the foundation for internal audit activities and ensuring alignment with local regulatory requirements. This document is typically used when establishing or updating internal audit functions, defining new audit engagements, or refreshing existing audit arrangements. It incorporates specific references to UAE legislation, including Federal Law No. 2 of 2015 and SCA regulations, while adhering to International Internal Audit Standards. The letter defines key elements such as scope, authority, responsibilities, and reporting structures, providing a clear framework for internal audit operations within the UAE's legal and regulatory context.

1. Addressee and Date: Formal address to the Board of Directors/Audit Committee, including date and reference number

2. Introduction: Brief opening stating the purpose of the letter and confirmation of the engagement

3. Scope of Internal Audit Services: Detailed description of the internal audit activities, areas to be covered, and the nature of services to be provided

4. Objectives: Clear statement of the engagement objectives and expected outcomes

5. Professional Standards: Reference to IIA Standards and UAE regulatory requirements being followed

6. Authority and Access: Statement of internal audit's authority and rights of access to records, personnel, and physical properties

7. Independence and Objectivity: Declaration of internal audit's independence and objective position within the organization

8. Reporting Structure: Description of reporting lines and communication protocols

9. Responsibilities: Detailed outline of responsibilities of both internal audit team and management

10. Timeline and Deliverables: Expected duration of engagement and key deliverables

11. Resource Allocation: Overview of team structure and resources dedicated to the engagement

12. Acceptance and Acknowledgment: Signature blocks and acceptance terms