Timely Issuance of Engagement Letters Accountants should maintain standard forms of engagement letters on their word processors so that an engagement letter can be issued to a client at the commencement of each engagement with little or no delay. As a practical matter, if a firm delays in delivering an engagement letter, the client will feel no great urgency to sign and return it. If an accounting firm wishes to receive the signed letter before it starts performing services for the client, it must move quickly in generating the appropriate engagement letter.
Some accountants are reluctant to begin using engagement letters for long-standing clients.
Occasionally, an accountant may get a client who balks at signing an engagement letter. The accountant should be prepared to explain the importance of engagement letters to such a client. The engagement letter is intended to help the client fully understand exactly what the accounting firm is doing. It lists any limitations of those services so that the client will not allow important functions to fall between the cracks. The use of engagement letters has become a standard professional practice.