Get Engagement Letter

The engagement letter defines the terms of your service. Once the engagement letter is signed by the client, the terms listed become legally binding. While the engagement letter is a contract, it is still written as a business letter, and conforms to the expectations of professional writing.

The purpose of the engagement letter is to inform the auditee of the nature of the engagement and to clarify the responsibilities of the parties involved.

Engagement letters should be issued to the client at the outset of an engagement and also when the scope of services changes significantly. New letters or revised schedules may be needed if, for example, there are changes to the standard terms and conditions, to the scope of services or to the basis for charging fees.

The engagement letter documents and confirms the auditor's acceptance of the appointment, the objective and scope of the audit, the extent of the auditor's responsibilities to the client and the form of any reports. Management's responsibility for establishing and maintaining effective internal control.

Engagement letters are commonly required by services firms engaged in tax, audit, finance, consulting, and legal advice. An engagement letter must be signed by authorized representatives of both parties before it is considered to be a legally binding arrangement.

Elements of an Engagement Letter Client name. Identifying the parties to the engagement seems obvious. ... Scope of services. ... CPA firm responsibilities. ... Client responsibilities. ... Deliverables. ... Engagement timing. ... Termination and withdrawal. ... Billing and fees.

A letter of engagement is a mandatory requirement which sets out the legal relationship between a professional firm and its client.