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D-045 - Engagement Letter For Compilation of Financial Forcast or Projection
D-045 - Engagement Letter For Compilation of Financial Forcast or Projection
Dear [Name]:
This letter is intended to outline our understanding of the nature and scope of the procedures to
be performed, as well as to confirm the objectives and terms of our engagement to compile the
financial forecast of [Entity].
If for any reason we are unable to complete our compilation of your financial forecast, we will
not issue a report on it.
A financial forecast presents, to the best of management’s knowledge and belief, [Entity’s]
expected financial position, results of operations, and cash flows for the forecast period. It is
based on management’s assumptions regarding conditions it expects to exist and the course of
action it expects to take during the forecast period.
Management is responsible for representations about its plans and expectations and for
disclosure of significant information that might affect the ultimate realization of the forecasted
results.
Usually, there will be differences between the forecasted and actual results, because events and
circumstances frequently do not occur as expected. If those differences are material, our report
will contain a statement to that effect.
We have no responsibility to update our report to include events and circumstances occurring
after the date of our report.
If management intends to reproduce and publish the forecast and our report thereon, they must be
reproduced in their entirety, and all drafts of the document containing the forecast, as well as any
accompanying material, must be submitted to us for approval.
If for any reason we are unable to complete our compilation of your financial projection, we will
not issue a report on it as a result of this engagement.
A financial projection presents, to the best of management’s knowledge and belief, [Entity’s]
expected financial position, results of operations, and cash flows for the projection period,
assuming [describe hypothetical assumptions]. It is based on management’s assumptions
regarding conditions it expects would exist and courses of action it expects would be taken,
assuming [describe hypothetical assumptions].
Management is responsible for representations about its plans and expectations and for
disclosure of significant information that might affect the ultimate realization of the projected
results.
Even if [state hypothetical assumptions] were to occur, there will usually be differences between
the projected and actual results, because events and circumstances frequently do not occur as
expected. If the differences are material, our report will contain a statement to that effect.
We have no responsibility to update our report to include events and circumstances occurring
after the date of our report.
We understand that the projection and our report thereon will be used only for [state intended
limited use]. If management intends to reproduce the projection and our report thereon, they
must be reproduced in their entirety, and all drafts of the document containing the projection, as
well as any accompanying material, must be submitted to us for approval.
Closing Language—To Be Used with Both Option (1) and Option (2)
Our fees for these services will be [at our regular rates/$[amount]] plus out-of-pocket expenses.
We will notify you immediately of any circumstances we encounter that materially affect our
total estimated fees. We will submit interim billings as work progresses and as we incur
expenses. Monthly invoices are payable upon receipt, and continuation of services is contingent
upon timely payments. We will assess a finance charge of [percent]% per month to all accounts
over 30 days old.
If these terms are acceptable to you and the services outlined are in accordance with your
understanding, please sign below and return this letter to my attention. A copy is enclosed for
your files.
We look forward to working with you and your staff, and we appreciate the opportunity to serve
you. Please call if you have any questions about any aspect of our engagement.
Sincerely,
[Firm]
Approved:
By
Date