Engagement Letters in your CPA Practice

June 22, 2015
Engagement letters are important as they set the tone for a working relationship between the accountant and their client. Your practice should have their engagement letter reviewed by an attorney to make sure you have the protections necessary and that the time period for which your services are provided.

You should always use an engagement letter, it is there for your protection. This document serves to minimize the professional liability risk you are exposed to and in many cases are required by malpractice insurance carriers.

These letters aren’t just there for protection, but can be used to introduce existing clients to other new services offered by your accounting firm that may be of interest to the client. Mentioning other services within the correct context also serves to prevent confusion as to the scope of work being performed.

Make sure to also include your expectations in terms of provided by client items that are required in order to complete the scope of work. Having all this in place is useful when the scope of work may change and thus may in turn require an amendment to the engagement letter.

In short send out your engagement letters prior to the engagement starting and get the signed engagement letters back. Some accounting practice management tools such as CPASquirrel allow you to both send and receive the necessary engagement letter to and from the client. Best practices include always using engagement letters so don’t forget to include them in your processes.

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