Client engagement
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.
Before accepting an appointment
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.
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Decision to accept an appointment
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.
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Money Laundering Regulations
Obligations under the Money Laundering Regulations should be satisfied before a practitioner agrees to act for any new client.
Company research
Use our company research tools to obtain the latest company profiles as part of your account opening and compliance.
Engagement letters
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.
Guidance on the preparation of engagement letters
The Technical Advisory Service helpsheet 'Engagement letters' provides a series of sample wordings for a variety of typical engagements:
- Draft text of an engagement letter
- Example schedules covering auditing, accounting and taxation work
- Additional wording that can be used to develop additional schedules or to include a limitation of liability clause
- Example terms and condition of business
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).
If you haven’t issued an engagement letter
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What if you haven't issued an engagement letter?
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 enquiry
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.
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Changes in Professional 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.
