Professional Liability Insurance providers and legal experts strongly support the regular use of engagement letters as part of your accounting practice.  There is evidence that a significant number of claims can be avoided or favorably defended if you document the clear terms of your engagement in an effective engagement letter prior to the start of the engagement.

Benefits of Engagement Letters:

• Identify terms, conditions, services, and fees with your client prior to the engagement, while you are on your best terms.
• Clearly identify fees to avoid future fee disputes.
• Marketing your services by identifying those services which you are not providing to a client, but could.
• Include favorable Alternative Dispute Resolution terms in the event of a disagreement.
• Inform clients, through a disengagement letter, when you are no longer representing them.
• Mitigate potential "failure to detect" claims by identifying the exact services you are providing and the intent of such services.