What is the primary purpose for establishing engagement objectives?

Establishing engagement objectives is vital as it clearly identifies the purpose of the audit. These objectives guide the audit process by outlining what the audit is intended to achieve, ensuring that both the auditors and the stakeholders have a common understanding of the goals. This clarity helps in focusing the audit activities on critical areas of concern, facilitating effective assessment and improvement of governance, risk management, and control processes.

Furthermore, while building client relationships, defining audit procedures, and allocating resources are all important aspects of the audit process, they derive from or are enhanced by having clear engagement objectives. If the objectives are not well defined, it can lead to misalignment in expectations and outcomes, resulting in inefficient audits that may not address the relevant issues or fulfill stakeholder needs effectively.