Management or those charged with governance may request us to expand the scope of the audit beyond that necessary to form our opinion on the financial statements. We may agree to perform those procedures in addition to, or separately from, the audit. We develop a service delivery plan that meets the entity’s expectations and manages EY’s risk. This plan incorporates, for instance, expected additional fees and communication. We formalize the agreed additional services in an engagement agreement.
In our discussions, we distinguish between the audit procedures required by professional standards and regulatory requirements and those additional procedures requested by management or those charged with governance.
We recognize that committing to unrealistic expectations or expectations beyond our current service capabilities can be detrimental to managing EY’s risk. As a result, we separately identify those expectations that are either unrealistic or beyond our current service capabilities, and we work with management and those charged with governance to address this.