Is it necessary to give engagement letter to the audit client every year?

As per ISA, The auditor may decide not to send a new audit engagement letter or other written agreement each period. However, the following factors may make it appropriate to revise the terms of the audit engagement or to remind the entity of existing terms:

 Any indication that the entity misunderstands the objective and scope of

the audit

 Any revised or special terms of the audit engagement.

 A recent change of senior management.

 A significant change in ownership.

 A significant change in nature or size of the entity’s business.

 A change in legal or regulatory requirements.

 A change in the financial reporting framework adopted in the

preparation of the financial statements.

 A change in other reporting requirements.

The engagement letter issued on the initial appointment as auditors may state that its provisions will apply to all future annual audits, until it is revised. However, ISA  two hundred and ten requires the auditor, for recurring audits , to assess whether:

          * Circumstances mean that the terms of engagement need to be revised.

          * Management need to be remainded of the existing terms of the engagement.

The ISA suggest that the following factors may indicate that the above is appropriate.

          *   A recent change of senior management

          *   A significant change in  ownership

          *  Change in legal or regulatory requirements

          *  A significant change in the nature or size of the entity's business

          *  The entity misunderstood the objective or scope of the audit etc. 

So it is not necessary to do so unless as mentioned above.