Guidance on the issues to be considered before accepting an appointment and best practice in drawing up an engagement letter upon accepting an appointment.
Members should also consult the Practice Assurance Standards, particularly the detailed guidance in Standard 2: client acceptance and disengagement.
When considering appointment to a new client we strongly advise firms to exercise due caution and assess the risks involved. Your decision to accept a new appointment should be based on a thorough, risk-based critical assessment of the proposed engagement.
This helpsheet provides a pro forma checklist to form the basis of a critical assessment of a proposed engagement ahead of accepting or declining an appointment.
Obligations under the Money Laundering Regulations 2007 should be satisfied before a practitioner agrees to act for any new client.
Use our company research tools to obtain the latest company profiles as part of your account opening and compliance.
On accepting an appointment, it is considered best practice to provide the client with a suitably worded Engagement Letter.
The engagement letter protects the firm by provide a record of the contract between your firm and the client, and minimises the risk of any future misunderstandings between the parties.
The client, by signing, dating and returning a copy of this letter, demonstrates their acceptance of the contract as summarised including details of the work and the terms and conditions applying to it.
Whilst a letter of engagement is not compulsory for non-regulated work, the issuing of an engagement letter is strongly advised for the successful management of business relationships. It also enables firms to communicate the legal requirements of the Services Directive and ethical requirements such as the basis of fees and the firm's complaints handling.
The Advisory Services helpsheet entitled 'Engagement letters PAS2/HS13' is structured as follows:
The Tax faculty publishes 'Engagement Letters for Tax Practitioners' (TAXGUIDE 1/13) as part of a collaborative working party comprising ACCA, ATT, CIOT, ICAEW and ICAS. Consequently, given its separate provenance, this provides member firms with some alternative wording for the covering letter and the terms and conditions of business, its schedules include the following:
The Library & Information Service holds a wide range of engagement letters and other types of letters used by practices (from comfort letters to letters of representation).
This helpsheet provides information and guidance on the minimum requirements member firms must communicate to their clients in writing in the absence of an engagement letter. It is written for firms not engaging in regulated work.
Professional enquiries should be made with the prospective client’s existing accountant to establish if there are any considerations that might affect the firm’s decision whether to accept appointment.
This helpsheet outlines the steps you should take, either when appointed to take over a client from another accountant (whether qualified or not), or when you are approached by another accountant appointed to take over the affairs of one of your clients.