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ToggleWhen you hire an accounting firm, it’s very important to describe the duties and responsibilities to the firm in order to maintain the accounting functionality of the business. So, that’s when the role of an engagement letter comes into existence.
An engagement letter is a signed agreement between a client and an accounting firm. It describes the relationship they need to carry along with the roles and responsibilities of the accounting firm they are to perform. It’s an outline of work, roles and responsibility you allot to the accounting firm.
Before you hire an accounting firm, the foremost thing that you should focus on is to make an engagement letter.
[blockquote]Creating an Engagement letter before hiring gives you the opportunity to think about what you can add or what must avoid in order to maintain the performance and the liability of the accounting firm towards your business.[/blockquote]
These three things are an essential part of the engagement letter.
It is very important to state a communication mode you can utilize while communicating important information to the accounting firm so that you avoid any miscommunication. You can use e-mail for this purpose.
We can specifically say that this is the core part of the Engagement Letter. One must clearly state the deadlines for submitting the project in the letter which can provide the accounting firm with a clearer view.
An Engagement letter also contains the necessary information that one needs to provide to the accounting firm so that the firm can work accordingly.
The engagement letter delivers nitty-gritty of the business to the accounting firm and thus contains a good amount of weight.