Under the code of ethics of the professional accountancy bodies, it is mandatory for accountancy practices, when taking on a new client or renewing the professional relationship with an existing client, to obtain a signed letter of engagement setting out the terms of the business agreement and contracted services. This blog highlights the top ten of engagement letter contents. More tips to follow in future blogs.
What needs to be included in a letter of engagement?
The best written letters should include the following:
- Cover letter/key facts;
- Standard terms of business/limitation of liability (except for audit work in the RoI);
- Reference to the appropriate accounting framework such as IFRS, FRS 102 or FRS 105;
- Audit;
- Accountant’s reports (i.e. for audit exempt and unincorporated entity assignments);
- ‘Agreed upon Procedures’ such as under the International Federation of Accountants ISRS 4400 where an auditor simply provides a report of the factual findings of agreed-upon procedures and where no assurance is expressed. Users of such reports assess for themselves, the procedures and findings which are reported by the auditor and draw their own conclusions from the auditor’s work;
- Accounting services e.g. accounts production, management accounting, bookkeeping;
- Taxation services;
- Other services e.g., payroll (including auto enrolment), VAT returns, company secretarial services;
- Specialist reporting assignmentsg. Central Bank requirements for insurance brokers and the Accountants’ Report to the Law Society under the Solicitors Accounts Regulations, 2023.
All the templates on our website have had a refresh as of June 2026 and the letters of engagement have had a new paragraph added for the potential use of artificial intelligence and machine learning on client assignments along with auto enrolment for payroll assignments. There is a bulk discount (five templates for the price of four) for purchases of five or more templates when purchased in a single transaction.
If you need an up-to-date engagement letter, there is a search bar near the bottom of our home page (www.jmcc.ie) to quickly look up the item you need. More details see here.
For those of you still in the process of ISQM 1 implementation, please see our ISQM TOOLKIT or if you prefer to chat through the different audit risks and potential appropriate responses presented by this new standard, please call or e-mail John McCarthy FCA or e-mail him at john@jmcc.ie.
We typically tailor our training and brainstorming sessions to suit each firm’s unique requirements.
Publications:
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- The ISQM TOOLKIT 2022 is available to purchase here.
- See our latest Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
- To ensure your letters of engagement and similar templates are up to date visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
