Guide to Effective Engagement Letters: Implementing Successful
Loss Prevention Practices, Seventh Edition
Ron Klein, Ric Rosario, and Suzanne M. Holl
by CCH; 773 pages (includes CD-ROM); paperback; $137, 10% discount
($123.30) if purchased online at www.camico.com;
20% discount ($109.60) for Camico members ordering online at members-only
website; ISBN: 978-0-8080-9086-0, ISSN 1539-5219
by Henry J. Krostich
- This volume, the latest edition of the only published work devoted
(nearly) entirely to creating engagement letters for the accounting
profession, is about 50% thicker than the fourth edition this reviewer
is most familiar with. The added pages include, in addition to updated
material, more sample letters on various current subjects, including
an engagement letter for remote-access bookkeeping services. And
while not exactly engagement letters, some samples could be used
with clients related to the theft of electronic data from the accountants’
office and on obtaining a client’s permission on outsourcing
tax-preparation services (potentially outside of the United States).
New sections discuss communicating internal control issues to clients
and developing a firm’s record-retention policy. The authors
have also upgraded the former appendix on disengaging from clients;
it now has its own chapter.
was, and remains, a must-have for all accounting professionals.
The understanding established between an accountant and a client,
and the documentation of this relationship, continue to make a
proper engagement letter more important with each passing year.
in my previous review, earlier editions had a significant shortcoming.
The authors warned readers not to use the book, and the included
samples, as a “forms book,” because each engagement
letter needed to be crafted for the specific conditions it was
intended to address. I believed then, and continue to believe,
that too many practitioners will be tempted to take the sample
letters, included on a conveniently provided CD-ROM, and do just
that: Copy the letter, add the proper name and address, and—voila,
done! In this edition, the authors have not made any attempt to
address this issue. The authors’ instructions, which have
not been modified from the earlier reviewed edition, continue
to warn the user not to use the very tools they provide.
also includes many sample paragraphs, which in the printed material
are notated with the authors’ comments and suggestions on
how or when to use each one as a building block in creating a
properly crafted engagement letter. As was hoped for more than
five years ago, these building blocks can be tied together to
provide a software application that would enable the practitioner
to easily choose appropriate selections from the suggested wording
for each area of the engagement letter, and thereby assemble a
truly customized result. I have seen at least one attempt at such
an engagement letter wizard by a major vendor of a working paper
software application, but it did not go far enough into the ability
to customize the letter, nor did it have the benefit of the extraordinary
depth of material that the CPA’s Guide to Effective
Engagement Letters has.
a product is developed, the user must continue to heed the authors’
advice to properly tailor each engagement letter, so as to properly
communicate the understanding reached between accountant and client.
J. Krostich, CPA, is managing partner of Krostich &
Krostich, LLP, Roslyn Heights, N.Y. He is a former member and past
chair of the NYSSCPA Peer Review Committee and a former member of
the AICPA Peer Review Board. He currently serves on the New York
State Board for Public Accountancy. His review of the fourth edition
of this book appeared in The CPA Journal in November 2002.
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