Engagement Letter Tool

Engagement letter tool
–––––––
New Zealand (December 2022)
(January 2020)
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Contents
Engagement letter tool .................................................................................................................................... 3
Engagement letter tool: FAQs ......................................................................................................................... 4
Build your engagement document .................................................................................................................. 9
Part 1: Letter .................................................................................................................................................... 9
Part 2: Terms and conditions ........................................................................................................................ 13
Appendix 1 Summary of engagement letter requirements .......................................................................... 23
Appendix 2: Client monies............................................................................................................................. 27
© Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ).
Formed in Australia. Members of CA ANZ are not liable for the debts and liabilities of CA ANZ.
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Engagement letter tool

Welcome to CA ANZ’s engagement letter tool, designed to assist members in practice to prepare
engagement documents for use with their clients in New Zealand. It is important you read the information
below before you get started.
CA ANZ has created this tool in response to requests from members, to assist in drafting engagement
documents by providing sample letter clauses, sample terms & conditions, and guidance on where these
could be used, or where tailored wording is appropriate.
IMPORTANT INFORMATION
• This tool is not suitable for use in relation to providing financial adviser services, nor for any client
in any jurisdiction other than New Zealand.
• This tool was prepared in December 2022. Laws, practices and regulations may have changed since
that time.
• This tool is provided to you on a general basis only and must not be relied on by you or any other
person as a substitute for appropriate professional and other advice tailored to your specific
circumstances. You should seek independent legal advice to confirm that any proposed letter is
suitable.
➢ Please send any feedback on this tool to

Tools&Resources@charteredaccountantsanz.com so we can continue to
improve our services for members.
Use of this tool and disclaimer

This tool has been prepared by Chartered Accountants Australia and New Zealand ABN 50 084 642 571 (CA ANZ) and its
subsidiaries, affiliates and controlled entities, including the New Zealand Institute of Chartered Accountants, a regulatory body
established under the New Zealand Institute of Chartered Accountants Act 1996 (NZ) and controlled by CA ANZ for use by its
members in New Zealand in relation to providing accounting services to clients in New Zealand. It is not intended for use in relation
to providing financial adviser services, or by any person who is not a CA ANZ member or who does not have appropriate expertise
in the letter’s subject matter, or in any other jurisdiction.
This tool provides general information only and is not intended to provide or substitute legal or professional advice on a specific
matter. Before using this guide, you should read it in full, consider its effect and determine whether it is appropriate for your and
your client’s needs and circumstances. You should also seek independent advice about its use and any modifications to any terms
required for your practice, your client and the specific engagement, including advice that the contents of the engagement letter
meets your professional and ethical obligations.
This tool was prepared in December 2022. Laws, practices and regulations may have changed since that time.
No warranty is given as to the correctness of the information contained in the tool, or of its suitability for use by you. To the fullest
extent permitted by law CA ANZ: (a) is not liable for any reliance you place on this tool; (b) disclaims all warranties with regard to
this guide; (c) is not liable for any indirect, special or consequential losses or damages; and (d) limits its aggregate liability to
AUD$100. Paragraphs (c) and (d) apply to all liability arising out of or in connection with this tool, whether arising in contract,
negligence, tort, under statute, or otherwise. If any guarantee or other term is implied or imposed by statute and cannot be
excluded, and CA ANZ is able to limit its liability for a breach of that term, then CA ANZ limits its liability to replacement of this tool
or the cost of replacing this guide. Nothing in this disclaimer limits or excludes any right or remedy, or any statutory guarantee or
other term, which cannot be lawfully limited or excluded.
Usage statement
This document is protected by copyright. CA ANZ grants its members a non-exclusive, non-transferable licence to use, copy,
modify, publish and communicate the contents of this tool solely in connection with the engagement of their clients. No other use is
permitted without approval by CA ANZ. If you choose to use it without amendment or adaptation, the ownership of copyright by CA
ANZ must be attributed at all times. If you do amend or adapt it, you must remove any attribution to CA ANZ.
Copyright Notice
© Chartered Accountants Australia and New Zealand 2022. All rights reserved.
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Engagement letter tool: FAQs
➢ Read these FAQs before moving to the engagement letter and terms &
conditions clauses
Why do I need an engagement document?

Your engagement document is the written contract with your client, facilitating a clear understanding
between you/your practice and your client regarding the terms of the engagement. Providing clear terms of
engagement can assist you to avoid disputes or confusion at a later date, as well as satisfying your
professional obligations.
Written engagement documents are required by professional standards and may also be required by
legislation or regulators. This guidance is written in the format of an engagement letter incorporating terms
& conditions as CA ANZ recommends this as best practice.
How does this tool work?

This tool is designed to assist you to write an engagement document by prompting you to consider key
issues, and providing you with standard clauses and terms you may use for common situations. It is
designed to be used as follows:
Read the guidance and questions

provided
Use this to select appropriate

clauses and guide your drafting of
appropriate wording
Create a tailored engagement

letter and terms & conditions
appropriate for your
engagement and practice
Why a letter plus terms & conditions?

This tool helps you to prepare an engagement document in the form of:
• engagement letter; plus
• terms & conditions.
This is now common practice in professional engagements, to address the many clauses that need to be
included to comply with regulations, professional standards, relevant legislation and other guidance.
Together these documents should, when adapted by your practice, address content required by
professional standards, legislative or commercial issues relevant to many accounting practices and
engagements.
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• The engagement letter will include information specific to the engagement.

• The terms & conditions are generic clauses which will be common across many engagements and
clients.
While it is common practice to issue an engagement document in the form of a letter, the engagement
document does not have to be in this format as long as it contains the appropriate content.
What are the rules?

All New Zealand resident members of CA ANZ are subject to the NZICA professional and ethical standards
including the Code of Ethics and the engagement standards and guidelines. See
https://www.charteredaccountantsanz.com/member-services/member-obligations/regulations-and-
guidance/new-zealand-regulations/nzica-rules-and-code-of-ethics
The Code of Ethics prescribes the behaviour expected of members. The engagement standards (and
guidelines) further prescribe (or recommend) professional behaviour in the context of certain professional
activities.
Assurance practitioners are also subject to the ethical standards promulgated by the External Reporting
Board (XRB). See https://www.xrb.govt.nz/
How does the Code of Ethics impact the terms of engagement?

Members are generally free to negotiate terms of engagement with their clients as they see fit so long as they
comply with the fundamental principles included in the Code of Ethics. i.e.:
o Integrity – requires members to be straightforward and honest in all professional and business
relationships and implies fair dealing and truthfulness - including in determining/negotiating the
terms to be included in a letter of engagement – particular care should be taken to ensure that naïve
and unsophisticated clients are not taken advantage of
o Objectivity – requires members to be free of anything that might compromise professional and
business judgement because of bias, conflict of interest or undue influence of others - any threat to
objectivity should, at a minimum, be disclosed in the letter of engagement (and client consent
obtained on client signature)
o Professional competence and due care – requires members to provide professional services
in a competent and timely manner – you must ensure you can meet the client’s requirements before
concluding the letter of engagement
o Confidentiality – requires members to respect confidentiality of information acquired as a result
of professional and business relationships, subject to certain exceptions – the letter of engagement
should clearly disclose these exceptions to the client – it should also request any disclosure
permissions the member needs to provide the service
o Professional behaviour – requires members to comply with relevant laws and regulations and
avoid conduct that might discredit the profession - you must ensure that your letter of engagement
is “fit for purpose” for your business and the services you offer to your clients. If you have any doubt,
you should obtain legal advice.
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What about the standards for specific types of engagements?

Specific content is required or recommended by professional standards and guidelines including:
➢ SES-2 Compilation of Financial Information. SES-2 requires a member to ensure there is a clear
understanding between the appointing party and the member regarding the terms of the engagement.
The standard lists matters that should normally be included a compilation engagement letter, and
Appendix 2 provides some example compilation engagement letter wording.
➢ TG-1 Tax Compliance Services. TG-1 states a member should obtain the taxpayer’s agreement to the tax
compliance services to be provided, and lists matters that should normally be included in the
engagement letter.
➢ ISA (NZ) 210 Agreeing the Terms of Audit Engagements or other relevant Assurance and Related
Services1 standards (e.g., ISRE (NZ) 2400 Review of Historical Financial Statements Performed by an
Assurance Practitioner who is not the Auditor of the Entity; ISRS (NZ) 4400 Agreed-upon Procedures)
require an engagement letter to be issued. ISA (NZ) 210 contains example audit engagement letter
wording. Similarly, other NZAuASB standards contain sample wording for specific assurance or related
service engagements. See https://www.xrb.govt.nz/
➢ AES 2 Independent Business Valuation Engagements requires a member to obtain the appointing
party’s agreement to the terms of the engagement, and lists matters that should normally be included in
the engagement letter.
➢ IS Insolvency Services requires a member who undertakes an “informal insolvency engagement” to
obtain the appointer’s agreement to the terms of the engagement, and lists matters that should normally
be included in the engagement letter.
➢ AES-1 Opinions on Accounting and Reporting Matters requires the terms of the advisory engagement
to be recorded in an advisory engagement letter, or other suitable form.
As this engagement letter tool is not designed to be used in relation to providing financial adviser services, you
should consult relevant professional standards (i.e. FAS: Financial Advisory Services); laws and regulations (i.e.
the Financial Markets Conduct Act 2013 as amended by the Financial Services Legislation Amendment Act 2019)
and obtain legal advice.
Learn more:
➢ You can find a summary of engagement letter requirements in professional standards in Appendix 1.
What do I need to include if I am a tax agent?

To link a client to you, you must have an authority to act letter or electronic authority from the client that gives
you legal permission to work with Inland Revenue on the client’s behalf and to access data held on the Inland
Revenue’s system. As a consequence, you should include wording in the engagement letter (or in the terms and
conditions, where the wording is standard for all clients) that:
➢ describes the parameters of the authority; and
➢ requires the client sign the authority
(or, alternatively, wording that refers to an Appendix or separate document that has this description and
requirement).
1In NZ, this means services to perform agreed upon procedures or other non-assurance work that may ordinarily be performed by
an assurance practitioner as determined by the XRB or NZAuASB. To date, the XRB and NZAuASB have not added any other non-
assurance services to their standard setting mandate.
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Refer to Inland Revenue’s Operational Statement for specific criteria to be satisfied for a valid authority to act2.
What do I need to include in the engagement document if I deal with client monies, (including
operating a trust account and/or deducting fees from client tax refunds)?
Professional Standard PS-2 Client Monies sets standards and provides guidance regarding a member or
firm’s professional responsibilities when holding, receiving or otherwise dealing with client monies. This
communication can be incorporated into an engagement document although the standards do not require
this.
The sample clauses in this engagement document do not address these requirements.
Learn more:
➢ You can find a summary of client monies requirements in Appendix 2.
When do I need to issue a new or amended engagement document to my client?

New engagements
You need to document and communicate the terms of engagement with all new clients to comply with
professional standards. CA ANZ recommends this is in the form of an engagement letter with terms &
conditions.
For some engagements such as audit engagements an engagement letter is mandatory for all new clients.
Recurring engagements
Open ended engagement documents are common for recurrent accounting compilation, tax compliance and
assurance services engagements. If you have issued an open-ended document, you need to be alert to any
changes or factors (i.e. both changes in type or scope of services and external factors such as changes in
legislation) that indicate you need to reissue or amend it and, where those changes or factors exist, reissue or
amend it promptly thereafter. Where you have not had cause to re-issue or amend the engagement
document earlier, best practice is to review engagement documents annually in order to ensure that they
remain ‘fit for purpose’.
How does this fit in with my practice’s client acceptance or continuance relationship policies
and procedures?
Issuing and re-issuing engagement documents should be part of your practice’s policies and procedures for
accepting and continuing client relationships as required by PES-3 Quality Management for Firms that
Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
and PS-1 Quality Management [for firms that perform engagements that are not within the scope of PES-3].
Together with your decision to accept or continue your relationship with your client, the decision to issue or
re-issue an engagement document should be documented annually.
2 Please note that there is no longer an IR authorisation form that members can simply attach as an Appendix.
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Learn more:
➢ The CA ANZ Quality Management Hub provides practices with information on quality management,
including links to the standards and helpful tools and resources. These tools and resources include
guidance on the documentation of policies and procedures for accepting and continuing client
relationships to assist in developing a system of quality management. They should be modified and
adapted to suit the specific needs of your firm.
How can I mitigate the risk of later disputes with clients?

You should ensure that the client understands and freely accepts the terms of engagement before they sign
the engagement document. In particular:
➢ Talk through the proposed engagement document with the client – explain matters that will be
important to them such as: the service you will provide; how and when the fees will be charged; what
will happen if they fail to pay including any interest, liens and/or collection/mediation/court action;
conflicts of interest; outsourcing (including any use of the “cloud”); your professional obligations
including exceptions to confidentiality; ownership of workpapers / transfer of records on termination
➢ If possible, provide an initial fee estimate – make sure it is realistic and includes some contingency
➢ Allow the client to take away the proposed engagement letter to read – be available if they have any
queries / request reasonable variations
➢ Do not start work until the client has returned the signed engagement letter.
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Build your engagement document

This guide has been prepared by Chartered IMPORTANT
Accountants INFORMATION
Australia and New Zealand for use by its members in New
Zealand
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in New services, or by any person who is not a CA ANZ member or who does not have
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appropriate
• This tool expertise in the letter’s
is not suitable for usesubject matter,
in relation to or in any other
providing jurisdiction.
financial adviser services, nor for any client in any
jurisdiction other than New Zealand.
When using this tool you must tailor the wording to your circumstances. Wording highlighted in yellow must be
•tailored,
Thisand
toolyou
wasmay
prepared in December
also need 2022.
to tailor other Laws,
aspects practices the
throughout anddocument
regulations may have
depending onchanged since that
your circumstances.
time.
• This tool is provided to you on a general basis only and must not be relied on by you or any other person
as a substitute for appropriate professional and other advice tailored to your specific circumstances. You
should seek independent legal advice to confirm that any proposed letter is suitable.
When using this tool you must tailor the wording to your circumstances. Wording highlighted in yellow must be
tailored, and you may also need to tailor throughout the document depending on your circumstances.
Part 1: Letter
User instructions and guidance Suggested content/wording
Guidance: [Letterhead of practice]
➢ If you have more than one practice entity, use the
appropriate letterhead for the engagement. If not, use your [Date]
practice letterhead.
 Insert name and address of the client, and the person you [Name and address]
are writing to. Dear [salutation]
Guidance: consider whether the party you are contracting with

has the authority to enter into a commitment with you.
 Amend this paragraph if the signatory to the letter is NOT Engagement letter
the main point of contact for the client. Thank you for engaging us. [I] will be your main point of
contact and will have primary responsibility for assisting
you. This engagement letter, including the attached terms
and conditions, sets out the basis of our engagement.
 Where there is more than one client, insert the name of all Who we are acting for
clients that are covered by the engagement letter. This may We are acting for [clients/you] only. Where you would like
be individuals, family members including spouses and us to act for anyone else, we will issue a separate
children, partnerships, trusts, companies (including group engagement letter to them.
companies) etc. Create a bullet-point list or attachment if
necessary.
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Guidance: This letter is your contract with the client, so ensure [(For multiple clients) Each signatory to this letter
the client(s) is specified in the letter especially where it is a legal authorises us to act on the instructions of [insert name(s)]
entity or there are multiple clients. on their behalf.]
Ensure the party you are contracting with has the authority to
enter into a commitment with you (including on behalf of any
other person, e.g. husband or wife).
 Insert any background information necessary to ensure Background

common understanding by all parties We understand that:
[Description of client’s facts];
[Description of transaction background]; and
[Other facts and circumstances relied upon].
 Amend this paragraph so it is suitable for period of the Period of engagement

engagement This engagement will start on [date]/starts on the date that
you sign and return this document to us. The first period
Guidance: for which we will be responsible is [tax year
➢ The start date should be on or after the client returns the ending/accounts period ending etc]. Previous [tax
signed and dated engagement letter. years/account periods] are not included as part of this
➢ If there is an end date for the engagement, amend the engagement unless specifically agreed by us.
paragraph to specify the end date.
➢ If the period is defined, for example for a consulting The terms of this engagement letter will continue to apply
arrangement, amend the paragraph to clarify the period of for future engagements unless otherwise agreed.
the engagement.
➢ Open ended contracts are common for recurrent accounting
compilation, tax compliance and assurance services
engagements. If you have issued an open-ended document,
you need to be alert to any changes or factors that indicate
you need to reissue or amend it and, where those changes
or factors exist, reissue or amend it promptly thereafter.
Where you have not had cause to re-issue or amend the
engagement letter earlier, best practice is to review
engagement documents at least annually.
➢ Refer to SES-2 paragraph 40 to identify some factors that
may make it appropriate to issue a new engagement
document.
 Amend this paragraph as necessary to adequately describe Scope of services

the service to be provided including information required by You have requested that we provide the following services:
professional standards, and other information required by [insert description of the services to be provided, at a
specific regulations and/or legislation applicable to the minimum:
engagement. • objectives of the engagement;
• reference to relevant legislation, regulations, and/or
Guidance: standards where the engagement involves the
➢ Consider whether specific clauses are required or performance of services covered by legislation or
recommended by legislation and/or regulations in the standards;
engagement letter.
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➢ Appendix 1 provides more information on what • details of any information to be provided by the client;
professional standards require. • details of any anticipated work outputs, including
➢ Best practice is to issue an updated engagement letter if timing and the intended use and distribution of
there is a change in scope or at least an addendum reports;
documenting the change. • any reliance to be placed upon the work of another
firm;
Note: In addition to the scope of services included here, some • any scope limitations; and
of the content required by professional standards is included in • any other information required by professional
the terms and conditions. standards or laws and regulations.]
If we agree to provide additional services to you, we may
provide you with a new or amended engagement letter. If
we do not, those additional services will be provided under
this engagement letter.
 Insert other relevant paragraphs here. [insert other additional paragraphs required]
Guidance:
Consider whether you need to add additional paragraphs to the
engagement letter for circumstances that are not covered by the
terms and conditions such as, but not limited to:
➢ client responsibilities, for example
o client to supply specific information(?)
o client to provide information for AML
compliance(?)
o client to sign an IR authority to act(?)
o client to provide access to records(?)
➢ disclosure and consent to act in respect of conflict of
interest(s) (Note: requirement to do this in writing
(paragraphs NZ R310.9.1 and NZ R310.9.2 of Code of
Ethics). For instance, if the clients’ interests no longer
align (e.g. divorce), you must determine the action you
need to take regarding the potential conflict of interest
using the conceptual framework in the Code of Ethics. If,
using the framework, you assess the threat to be at an
“acceptable level”, at a minimum, you should disclose the
potential conflict of interest, suggest independent advice,
and obtain each client’s consent to continue to act. In
some situations, you will assess that you are unable to put
in place sufficient safeguards to continue to act for one or
both clients and disengagement will be necessary.
➢ disclose of any commissions you may receive as part of the
engagement in accordance with paragraph NZ R330.5.1 of
Code of Ethics (Note: also, prohibition in NZ R330.5.2)
➢ where client money permissions are included in the
engagement document, the parameters of those
permissions.
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 Insert your fee summary based on your method and basis of Fees
billing. If you have agreed a billing schedule with the client Our fees will be charged in accordance with the attached
this should be included. terms and conditions. Please review these to ensure you
understand the basis of our charges and our payment
Guidance: terms. [By way of summary, we estimate that our fees for
Ensure the fee structure, scope and terms are clear to both [insert period] will be as follows:
parties through this paragraph, and the terms and conditions, to
avoid any disputes or confusion at a later date. [service item]
➢ If your practice policy is to base your fees on hours worked, $[ ]
your schedule of charge-out rates should either be set out [service item]
here or in the terms and conditions, as appropriate.
$[ ]
Similarly, if some of your charges are fixed, such as
company office filings etc., they should also be clearly set Total
out here or in the terms and conditions, as appropriate. $[ ]]
➢ If your practice policy is to require the client to pay a fixed
amount in advance or on set dates, include this information
here or in the terms and conditions, as appropriate. You
may also like to include a mechanism to set up regular
payments (e.g. request for the client to include credit card
details when they accept the engagement letter/document)
➢ Include agreement to any third party service charges, such
as software provider, tax audit insurance or similar.
Guidance: Your agreement

➢ It is recommended you obtain confirmation of the terms of Please confirm your agreement to the terms of this
engagement from the client in writing. The best way to do engagement letter by signing and returning one copy of this
this is to have the client sign and return the letter. letter to us. You will also be deemed to have accepted the
➢ If the engagement is with multiple clients, you must ensure terms of this engagement by providing instructions to us to
that the engagement letter is signed by each of those clients provide services to you, but you must still provide a signed
to ensure appropriate authority. copy of this letter as soon as possible.
Guidance: Yours sincerely

 Insert the signature of the practitioner, practice or company
who will sign off on the engagement. This signatory should
be a person who has the authority to bind the practice (e.g. a
partner on behalf of the other partners or a director who has [insert sign-off]
been delegated authority by the board).
 Include a signature block for each client. Acceptance
I [We] have reviewed the terms offered by [insert name of
Guidance: practice] in this letter, including the attached terms and
➢ The letter must be signed by a Chartered Accountant conditions, and agree to be bound by it.
holding a Certificate of Public Practice, or an approved Non
Member Principal (NZICA Rule 11) Name Signed
➢ Where a person is signing under a power of attorney, you Date
should request a copy of the power of attorney document to [for and behalf of[client] / for and behalf of [name]
confirm that the person is duly appointed and has the power under a power of attorney dated [date]]
to sign the engagement letter on behalf of another.
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Part 2: Terms and conditions

The terms and conditions should disclose the standard terms and conditions that apply to all your engagements (or a subset
thereof – i.e. compliance, audit etc.) and that do not routinely require variation. Terms and conditions particular to an
individual engagement should be included in the letter.

Guidance Terms and conditions
➢ These terms and conditions are a guide to what you may
need to include in your terms of engagement. You
should consider the extent to which they apply to your
practice, and whether you need to amend, delete or add
to these terms to suit your own situation.
➢ Where these terms and conditions align with the
recommendations in professional standards, this is
indicated in the guidance.
➢ Other terms and conditions in addition to those required
to comply with professional standards are included,
based on common commercial considerations or best
practice. You may choose to include these in your
engagement document.
1. Who may instruct us
You confirm that you, and any other person you nominate in
writing from time to time (provided we have acknowledged
such nomination), are authorised to give us instructions and
information on behalf of all persons we are acting for and to
receive our advice and documents on their behalf.
If we are acting for a business, and we receive conflicting

advice, information or instructions from different persons,
we may refer the matter to the board of directors, partners or
proprietors (as applicable) and act only as requested by
them.
 Include this clause only if you are providing services to a 2. You and your [spouse/partner]
couple, and it is appropriate to this engagement. We will advise you and your [spouse/partner] on the basis
that you are a family unit with shared interests. We may deal
with either of you and may discuss with either of you the
affairs of the other. If you wish to change these
arrangements, please let us know.
3. Know your customer
Guidance:
From 1 October 2018, all New Zealand accounting practices
Not all accounting practices are captured by the Anti- became subject to New Zealand's Anti-Money Laundering
Money Laundering and Countering Financing of Terrorism and Countering Financing of Terrorism Act 2009. Where we
Act 2009. It only applies where the reporting entity is are required to conduct customer due diligence, this Act does
providing services captured by the legislation. For further not allow us to act, or continue to act, for our clients unless
information, visit: we have conducted that due diligence.
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https://www.dia.govt.nz/AML-CFT-Information-for- Accordingly, we may be required to verify your identity for
Accountants the purposes of the anti-money laundering laws. We may
request from you such information as we require for these
purposes and make searches of appropriate databases.
 Include the section on audit (highlighted in yellow) if 4. Your responsibilities

you are engaged to conduct an audit or assurance You must provide us with all information necessary for
engagement. dealing with your affairs including information which we
 There may be other standard client responsibilities that reasonably request, in sufficient time to enable our services
should be included here depending on the nature of the to be completed before any applicable deadline. We will rely
on such information being true, correct and complete and
practice and/or engagement type, such as to sign and
will not audit the information [except to the extent we are
return the IR authorisation. specifically engaged to provide audit-related services].
Guidance You authorise us to approach such third parties as may be

➢ Client records provided for the purpose of the appropriate for information that we consider necessary to
engagement are likely to be relied upon without deal with your affairs.
verification and this should be explicitly stated (SES-2).
➢ Although not undertaking an audit, members are You must keep us informed on a timely basis of changes in
reminded of their professional responsibility to apply your circumstances that may affect our services.
critical assessment to information provided by the client.
[Add other standard client responsibilities as relevant to the
nature of the practice and/or engagement type.]
 Delete the section on audit (highlighted in yellow) if this 5. Qualifications on our services
is an audit or assurance engagement. To the extent our services involve the performance of services
established by law, nothing in the engagement letter or these
Guidance terms reduce our obligations under such law.
Clarify the services you are offering.
You must not act on advice given by us on an earlier occasion
without first confirming with us that the advice is still valid.
Our services are limited exclusively to those you have

engaged us to perform. Unless otherwise specified in the
engagement letter, our services cannot be relied upon to
disclose irregularities and errors, including fraud and other
illegal acts, in your affairs. [Neither an audit nor a review will
be conducted and, accordingly, no assurance will be
expressed.]
Where our engagement is recurring, we may amend our

engagement letter and these terms where we consider it is
necessary or appropriate to do so. If you do not accept such
amendments, you must notify us promptly in which case you
may terminate our engagement in accordance with section 18
below and those amendments will not apply prior to such
termination.
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6. Reliance on advice
We will endeavour to record all advice on important matters
in writing. Advice given verbally is not intended to be relied
upon unless confirmed in writing. If we provide verbal advice
(for example during a meeting or telephone conversation)
that you wish to rely on, you must ask us to confirm the
advice in writing.
7. Investment and financial advisory advice

We are prohibited from providing you with investment or
financial advice regulated under the Financial Markets
Conduct Act 2013, as amended by the Financial Services
Legislation Amendment Act 2019.
Guidance 8. Professional obligations and confidentiality
Alert your client to your obligation to comply with the Code
of Ethics (including compliance with authorities, professional We are required to comply with all applicable by-laws, rules,
obligations, confidentiality and conflicts of interest). regulations, professional and ethical standards and
guidelines of Chartered Accountants Australia and New
Zealand and the New Zealand Institute of Chartered
Accountants (NZICA).
These requirements include the NZICA Code of Ethics, which
among other things contains confidentiality
requirements. In accordance with these requirements, we
will not disclose information we obtain in the course of this
engagement to other parties, without your express consent,
except as required by:
 laws and regulations (for example, disclosures required
under the Anti-Money Laundering and Countering
Financing of Terrorism Act 2009 (including to a third
party auditor) and as required by the Common
Reporting Standard)
 professional obligations including:
o the provisions of the NZICA Code of Ethics that
apply if we become aware of actual or potential ‘non-
compliance with laws and regulations’
(NOCLAR). Where any such non-compliance poses
substantial harm (such as adverse consequences to
investors, creditors, employees or the public), we
may be required to disclose the matter to an
appropriate level of management or those charged
with governance and/or an appropriate authority.
o the provisions of the NZICA Rules and Professional
Standards that subject us to practice review, trust
account audits, investigations and disciplinary
procedures. These rules require us to disclose to
NZICA, its practice reviewers and/or its disciplinary
bodies our files and workpapers including client
information. In accepting this engagement you
acknowledge that, if requested, our files related to
16

this engagement, may be made available to NZICA,
its practice reviewers and/or its disciplinary
bodies. Employees and contractors of NZICA are
also bound by confidentiality under contract and by
the NZICA Code of Ethics.
 Amend if you are aware of a conflict of interest, only if it 9. Conflicts of interest
is appropriate for you to continue to act. We will inform you if we become aware of any conflict of
 It may also be appropriate to describe the conflict in the interest in our relationship with you (including between the
body of the engagement letter. various persons this engagement letter covers) or in our
relationship with you and another client. Where conflicts are
Guidance identified which cannot be managed in a way that protects
You are required to take reasonable steps to identify your interests or you do not consent to the way in which we
circumstances that might create a conflict of interest before propose to manage the conflict then we will be unable to
accepting a new client relationship or engagement, and provide further services to some or all of the persons to
remain alert to changes over time that might create a conflict whom this engagement applies. If this arises, we will inform
of interest while performing an engagement you promptly.
(Code of Ethics R310.5 and R310.6).
We may act for other clients whose interests are not the same
If the clients’ interests no longer align (e.g. divorce), you as or are adverse to yours, subject to the obligations of
must determine the action you need to take regarding the conflicts of interest and confidentiality referred to above.
potential conflict of interest using the conceptual framework
in the Code of Ethics. If, using the framework, you assess the [Replace with appropriate wording if you are aware of a
threat to be at an “acceptable level”, at a minimum, you conflict of interest, only if it is appropriate for you to
should disclose the potential conflict of interest, suggest continue to act.]
independent advice, and obtain each client’s consent to
continue to act. In some situations, you will assess that you
are unable to put in place sufficient safeguards to continue to
act for one or both clients and disengagement will be
necessary.
 Amend to reflect your billing terms. 10. Fees and payment

 If you are effectively acting as an agent through third Our fees will be charged on the basis set out in the
party arrangements include wording so your client is engagement letter and have been set based on the level of
aware of this. It should be included in the wording of the skill, responsibility, importance and value of the advice, as
main letter too. well as the level of risk.
Guidance If we have provided you with an estimate of our fees for any
➢ This section contains information to supplement the specific work, this is an estimate only and our actual fees may
detail you included in the body of the engagement letter, vary.
to clarify the basis of fees.
➢ Amend to reflect your terms of trade, and GST status. We may provide a fixed fee for the provision of specific
services. If it becomes apparent to us, due to unforeseen
circumstances, that a fixed fee is inadequate, we may notify
you of a revised figure and seek your agreement to it.
We will bill [monthly]/ [quarterly]/ [half-yearly] and our
invoices are due for payment [upon presentation/within
[14]/ [30] days of issue]. Our fees set out in our engagement
letter are exclusive of GST which will be added to our invoice
17

where it is chargeable. Any disbursements and expenses we
incur in the course of performing our services will be added
to our invoices where appropriate.
Unless otherwise agreed to the contrary, our fees do not

include the costs of any counsel, or other professionals or
third parties engaged with your approval.
We may charge interest on late paid invoices at the rate of

[x%] above the Reserve Bank of New Zealand cash rate.
We may also suspend our services or to cease to act for you

on giving written notice if payment of any fees is unduly
delayed. We intend to exercise these rights only where it is
fair and reasonable to do so.
 Include this clause if you intend to try to claim a lien. 11. Lien
If permitted by law and not prohibited by professional
Guidance / Important Note standards or guidelines, we may exercise a lien over all
➢ Whether this clause will allow you to actually claim a lien materials or records in our possession relating to all
in a particular scenario will be dependent on the engagements for you until all outstanding fees and
particular facts and circumstances of that scenario. disbursements are paid in full.
There are a number of situations where a lien cannot be
claimed, including (but not limited to):
o personal information required to be provided to
an individual in accordance with information
principle 6 of the Privacy Act 2020;
o books and records required to be held at a
company’s registered office;
o books and records required to be provided to a
liquidator.
➢ Retaining client information and records when the lien is
not valid can give rise to claims of conversion and
damages. –CA ANZ recommends that you obtain legal
advice to confirm that the lien is valid at the time you
wish to exercise the lien.
➢ If your practice partners with an accounting software
provider, you may also need to amend this clause to have
regard to any specific requirements which are part of
your service agreement
 Include this clause if you maintain, or intend to, a trust 12. Client money
account for this client. We maintain a trust account for dealing with client monies
on their behalf. We can only accept money into our trust
Guidance account on your behalf if you have provided us with a written
➢ If you intend to operate a trust account in relation to the trust account authority letter which details the authority
client, or where a member is a signatory on a client bank given to us in relation to that trust money.
account you will need to comply with the requirements We may need to undertake further client due diligence to
of PS-2 Client Monies. This requires that client monies comply with our obligations under the AML Act. We may not
18

be dealt with through a trust account or client bank be able to process a transaction if the required information is
account, and only in accordance with a client's not provided.
instructions.
➢ Note: If you intend to use this engagement letter to also
obtain permissions from the client in relation to client
money, you will need to add all the paragraphs required
by PS-2 to the letter including the parameters of those
permissions.
➢ You can find a summary of client monies
requirements in Appendix 2.
Guidance 13. Disclosure permissions

This clause clarifies the express consent you require from In accepting this engagement, you provide us with your
the client to ensure you do not breach your confidentiality express consent to disclose your information to:
obligations in respect to the engagement (see clause 8).
• our service providers or regulatory bodies to the
extent required to perform our services in respect to
this engagement;
• our professional advisors or insurers to the extent
required to protect our interests in respect to this
engagement;
• our external peer reviewer to the extent required to
review this engagement; and
• [insert any other permissions you may require – for
example, providing client personal details for
marketing purposes (including provision of details to
third parties)].
We will take reasonable steps to ensure any such recipient
(other than a regulatory body) keeps such information
confidential on the same basis we maintain in respect to
your information (see clause 8).
We may retain your information during and after our
engagement to comply with our legal requirements or as
part of our regular IT back-up and archiving practices and
also for professional reasons (e.g. to perform the work
under this engagement or to comply with our professional
and ethical obligations). We will continue to hold such
information confidentially.
We may mention that you are a client for promotional
purposes.
 You must seek further advice on this clause if personal 14. Privacy
information of non-New Zealand residents will be We may collect, store, use and disclose your personal
disclosed to you (even if the client is in New Zealand) as information for the purposes of providing the services
there may be additional laws and regulations applying to described in the engagement letter to you and to comply with
19

personal information of individuals in other jurisdictions our obligations in section 9 above and in accordance with the
(e.g. GDPR for EU residents) disclosure exceptions outlined in section 8 above. We will
comply with the Privacy Act 2020 when collecting, storing,
Guidance using and sharing your personal information. Our Privacy
Policy provides further details of our privacy practices and
You should carefully consider how you will comply with your
our obligations to you.
privacy obligations under New Zealand law. For more
information, please refer to the website of the Office of the
New Zealand Privacy Commissioner
https://www.privacy.org.nz/.
Guidance 15. Ownership of materials
➢ This clause clarifies ownership of documents produced We own the copyright and all other intellectual property
as a result of the engagement, (SES-2 36(l)). rights in everything we create in connection with this
➢ It should also describe what documents will be provided engagement. Unless we agree otherwise, anything we create
and in what format when the client changes accountant in connection with this agreement may be used by you only
➢ If your practice partners with an accounting software for the purpose for which you have engaged us.
provider, you may also need to amend this clause to have
regard to any specific requirements which are part of All working papers prepared by us (in any form whatsoever,
your service agreement (e.g. if there are certain costs including physical and electronic) remain our property. We
involved in transferring data from one accounting will retain these papers in accordance with our normal record
software provider to another) keeping practices in accordance with our professional and
legal obligations.
[insert any other terms that are required]
You agree we can use your logos and trade marks for the sole
purpose of providing advice to you in connection with the
engagement, unless you tell us otherwise.
Guidance 16. Limitation of liability

This clause clarifies how your liability is limited (SES-2 To the maximum extent permitted by law, our maximum
36(m)). If you insert an amount to limit your liability, ensure aggregate liability (including of all our [principals, partners,
it is reasonable (this is highly dependent on the specific directors and members]) under or in connection with this
circumstances of the engagement – as a guide, this can be engagement letter or its subject matter is limited to $[insert].
aligned to the amount of your professional indemnity You agree not to bring any claim against any of our
insurance but you should seek independent legal advice). [principals] [partners] [directors] [members] or [employees]
in their personal capacity.
To the maximum extent permitted by law, we are not liable
to you for:
• indirect, special or consequential losses or damages of
any kind; or
• liability arising due to the acts or omissions of any other
person or circumstances outside our reasonable control,
or your breach of these terms.
17. Limitation of third party rights

Our advice and information is for your sole use, and we
accept no responsibility to any third party, unless we have
20

expressly agreed in the engagement letter that a specified
third party may rely on our work.
18. Termination
Each of us may terminate this agreement by giving not less
than [21] days’ notice in writing to the other party except
where a conflict of interest has arisen, you fail to cooperate
with us or we have reason to believe that you have provided
us or any other person with misleading or factually
inaccurate information, in which case we may terminate this
agreement immediately. Termination will not affect any
accrued rights.
Guidance 19. Communication

While this does not specifically refer to providing You must advise of any changes to your contact details. We
promotional material, you should be aware of your may send any communications to the last contact details you
obligations in relation to EU clients in relation to have provided. Unless you instruct us otherwise we may,
promotional material. Under the EU GDPR, you cannot where appropriate, communicate with you and with third
provide promotional material to any EU client without your parties via email or by other electronic means. The recipient
client's express "opt in" consent or another legal basis exists. is responsible for virus checking emails and any attachments.
This is also best practice to ensure compliance with the There is a risk of non-receipt, delayed receipt, inadvertent
Unsolicited Electronic Messages Act 2007 in respect of misdirection or interception by third parties in any form of
commercial electronic communications with a New Zealand communication, whether electronic, postal or otherwise. We
link. This can be achieved through a checkbox that the Client are not responsible for any such matters beyond our control.
must tick, for example:
“We would like to send you promotional material and news

about our firm. To join our mailing list, simply tick the box
below. You can unsubscribe at any time.
☐ Yes, I would like to receive promotional material from
[insert]”
You will also need to ensure that a working unsubscribe

facility or procedure is included.
20. Applicable Law

Our engagement is governed by New Zealand law. The New
Zealand courts have non-exclusive jurisdiction in relation to
any dispute between us.
21. Interpretation
If any provision of the engagement letter or these terms is
void, that provision will be severed and the remainder will
continue to apply. If there is any conflict between the
engagement letter and these terms, these terms prevail.
21

 Amend to reflect your disputes and complaints policy 22. Disputes and complaints
including any mediation or arbitration arrangements If you have any concerns about our costs or services, please
you have in place to resolve disputes that you cannot speak to the person responsible for this engagement, who is
resolve with the client yourself. identified in our engagement letter. To resolve your concerns
we have policies and procedures in place to deal
Guidance appropriately with complaints and will use best endeavours
Your practice is required by PES-3 Quality Management for to resolve a complaint or dispute to the mutual satisfaction of
Firms that Perform Audits or Reviews of Financial the parties involved. We may require you to detail your
Statements, or Other Assurance or Related Services complaint in writing to allow us to fully investigate any
Engagements and PS-1 Quality Management [for firms that concerns that you raise.
perform engagements that are not within the scope of PES-3]
to establish policies and procedures to deal appropriately
with complaints and allegations from clients.
Guidance 23. Outsourcing

➢ If you outsource services it is important you disclose to We may utilise the services of [insert name of third party and
the client the geographical location of the outsourced location] and other third parties from time to time and as
service provider and the nature and extent to which separately notified to you to [insert description of third party
outsourced services are used in the delivery of the services]. To perform the services, we provide these third
service. Under the Privacy Act 2020, if the outsourced parties with access to your data to the extent this is required
service provider is based overseas, you may only disclose to perform the services.
to that provider if the provider is subject to similar This [requires/does not require] information being sent to
safeguards to those in the Privacy Act 2020. If a [our service provider/overseas] in accordance with our
jurisdiction does not offer similar protections, the Privacy Policy.
individual concerned must be fully informed that their
information may not be adequately protected and they [insert any specific requirements arising if relevant relating
must expressly authorise the disclosure. However, note to your service agreement with an accounting software
that this will not capture third parties solely receiving provider]
and processing information as your agent (for safe
custody or processing), as the information is still treated
as being held by you.
➢ If your practice partners with an accounting software
provider, you may need to amend this paragraph to have
regard to any specific requirements which are part of
your service agreement.
 Amend to reflect your independent legal advice. 24. [Other]
[insert any other appropriate clauses]
Guidance
You should seek independent legal advice to confirm that
proposed document is appropriate.
22
• This tool is not suitable for use in relation to providing financial adviser services, nor for any client
in any jurisdiction other than New Zealand.
• This tool was prepared in December 2022. Laws, practices and regulations may have changed
since that time.
• This tool is provided to you on a general basis only and must not be relied on by you or any other
person as a substitute for appropriate professional and other advice tailored to your specific
circumstances. You should seek independent legal advice to confirm that any proposed letter is
suitable.
23
Appendix 1 Summary of engagement letter requirements

This summary is for information purposes only and should not be seen as a substitute for consulting the
standards and guidance notes themselves.
SES-2 Compilation of Financial Information
SES-2 Compilation of Financial Information paragraph 34 requires a member to ensure there is a clear
understanding between the appointing party and the member regarding the terms of the engagement. The
terms of the engagement must be recorded in an engagement letter, or other suitable form, and
communicated to the appointing party, and in paragraph 35 the use of an engagement letter is
recommended.
Paragraph 36 lists a number of matters that members should generally include in the terms of engagement:
➢ the nature of the engagement, including the fact that neither an audit nor a review engagement will be
carried out and that, accordingly, no assurance will be expressed;
➢ the applicable financial reporting framework or basis of accounting to be used to compile the financial
information and the fact that this will be disclosed as part of the financial information, together with any
known material departures from this, and referred to in the compilation report issued for the
engagement;
➢ where applicable, the requirement for general purpose financial statements to be prepared in
accordance with generally accepted accounting practice in New Zealand and if compliance with
generally accepted accounting practice does not result in a true and fair view of the financial
information, additional explanations will be required to achieve that result;
➢ the fact that management of the entity is responsible for the accuracy and completeness of the
accounting records and other information supplied to the member, and for the reliability, accuracy and
completeness of the financial information compiled on the basis of those records and information;
➢ the information to be supplied and confirmation that any other information that the member considers
necessary to complete the engagement will be supplied on a timely basis;
➢ the fact that the engagement cannot be relied upon to disclose internal control weaknesses, errors,
illegal acts or other irregularities, for example, fraud or noncompliance with laws and regulations
applicable to the entity;
➢ the fact that the member will inform the appropriate level of management of the entity or those charged
with governance of the entity, as appropriate, of any matters that come to the member’s attention in the
course of performing the compilation engagement which cause the member to believe or suspect that
errors or misstatements, illegal acts or other irregularities exist, either in relation to the entity or the
financial information that is the subject of the engagement;
➢ the intended use and distribution of the information once compiled, including expected use of the
information by third parties;
➢ the form of report to be issued by the member regarding the financial information compiled and the
frequency of these reports;
➢ the fact that independence of the member from the entity or the appointing party is not a requirement
for an engagement to compile financial information;
24
➢ the fact that access to the entity’s records and information in the member’s possession which support
the member’s working papers relating to the entity’s affairs may be required by the Institute for the
purpose of the Institute’s quality assurance function;
➢ the fact that any working papers prepared by the member in relation to the engagement are the
member’s property; and
➢ any disclaimer of liability statement.
If the member is aware that they are not independent of the entity, a statement to that effect must be made
in the engagement letter and in the member’s report in accordance with paragraph 26.
SES-2 Appendix 2 contains example compilation engagement letter wording.

SES-2 Appendix 4 contains example wording for disclaimer of liability statements
TG-1 Tax Compliance Services

TG-1 Tax Compliance Services applies when a member is requested to provide, or provides tax compliance
services. Members are also encouraged to apply this Guideline when providing other tax services.
Paragraphs 25-26 states that a member should obtain the taxpayer’s agreement to the tax compliance
services to be provided. This agreement should be documented and communicated to the taxpayer,
preferably before the commencement of the engagement. TG-1 recommends this is through an engagement
letter.
Paragraph 27 reminds a member to tailor the terms of engagement for each taxpayer and the nature of
services to be provided. The following matters should normally be included in the engagement letter:
(a) the member’s acceptance of the appointment
(b) the objective and scope of the tax compliance services to be provided
(c) the timeframe within which the assignment is expected to be undertaken
(d) the extent of the member’s responsibilities to the taxpayer and others, if any
(e) the member’s responsibility to notify the client of taxes payable or refunds due
(f) the basis on which the member will be remunerated
(g) the method of payment of fees, particularly when the fees will be offset against refund cheques.
(h) cover disclaimers in respect of limitation of liability (paragraph 28)
(i) the client’s responsibility for the content of the return (paragraph 30).
25
ISA (NZ) 210 Agreeing the Terms of Audit Engagements

ISA (NZ) 210 Agreeing the Terms of Audit Engagements paragraph NZ 10.1 requires that the agreed terms
of the audit engagement shall be recorded in an audit engagement letter or other suitable form of written
agreement and shall include:
(a) The objective and scope of the audit of the financial report;
(b) The responsibilities of the auditor;
(c) The responsibilities of those charged with governance;
(d) Identification of the applicable financial reporting framework for the preparation of the financial report;
and
(e) Reference to the expected form and content of any reports to be issued by the auditor; and
(f) A statement that there may be circumstances in which a report may differ from its expected form and
content.
Further guidance is contained in paragraphs A23-A26.
ISA (NZ) 210 Appendix 1 contains example audit engagement letter wording. Other NZAuASB
standards contain example engagement letter wording for other assurance and related services
engagements.
ISRE (NZ) 2400 Review of Historical Financial Statements Performed by an Assurance

Practitioner
ISRE (NZ) 2400 Review of Historical Financial Statements Performed by an Assurance Practitioner
paragraph 37 requires that the agreed terms of engagement shall be recorded in an engagement letter or
other suitable form of written agreement, and shall include:
(a) The intended use and distribution of the financial statements, and any restrictions on use or distribution
where applicable;
(b) Identification of the applicable financial reporting framework;
(c) The objective and scope of the review engagement;
(d) The responsibilities of the assurance practitioner;
(e) The responsibilities of management,
(f) A statement that the engagement is not an audit, and that the assurance practitioner will not express an
audit opinion on the financial statements; and
(g) Reference to the expected form and content of the report to be issued by the assurance practitioner, and
a statement that there may be circumstances in which the report may differ from its expected form and
content.
Further guidance is contained in paragraphs A52-56.
ISA (NZ) 2400 Appendix 1 contains example engagement letter wording. Other NZAuASB standards
contain example engagement letter wording for other assurance and related service engagements.
26
AES 2 Independent Business Valuation Engagements

AES-2 Independent Business Valuation Engagements paragraph 14 states that a member must obtain the
appointing party’s agreement to the terms of the engagement. The terms of the engagement must be
recorded in an engagement letter, or other suitable form, and communicated to the appointing party.
Paragraph 16 states the engagement letter:
➢ documents and confirms the member’s acceptance of the appointment,
➢ the objective and scope of the independent business valuation engagement,
➢ the extent of the member’s responsibilities to the appointing party and others, if any,
➢ the nature and extent of reporting and
➢ the basis on which the member will be remunerated.
IS Insolvency Services
IS Insolvency Services makes a distinction between formal insolvency services and informal insolvency
services.
Formal appointments, such as appointment under a relevant Act or a Court appointment, do not require an
engagement letter. However, written consent to act will usually be required before commencement of the
engagement.
Paragraph R4.5 addresses informal insolvency services such as: an investigating accountant report. In this
instance, the member shall obtain the client’s agreement on the terms of the engagement. The terms of the
insolvency engagement shall be tailored to the nature of the insolvency issues under review and shall be
recorded in an insolvency engagement letter, or other suitable form, and communicated to the appointer.
Further guidance in paragraph 4.5A covers recommended content of an engagement letter:
(a) the member’s acceptance of the appointment;
(b) the objective(s) and scope of the insolvency engagement;
(c) the extent of the member’s responsibilities to the appointer and others, if any;
(d) the nature and extent of any reporting;
(e) the basis on which the member shall be remunerated and draw fees; and
(f) that the member will not act in a management or governance role.
AES -1 Opinions on Accounting and Reporting Matters

AES-1 Opinions on Accounting and Reporting Matters paragraph 17 requires a member to seek a written
understanding and agreement with the party engaging the advising member as to the nature of the
engagement, the information to be provided to the advising member, the type of report to be issued, and any
restriction on the distribution or use of the report. The terms of the advisory engagement must be recorded
in an advisory engagement letter, or other suitable form, and be communicated to the party engaging the
advising member.
27
Appendix 2: Client monies

This summary is for information purposes only and should not be seen as a substitute for consulting the
standards and guidance notes themselves
Professional Standard PS-2 Client Monies sets requirements and provides guidance regarding a member or
firm’s professional responsibilities when holding, receiving or otherwise dealing with client monies on
behalf of clients, including operation of client bank accounts.
In addition to addressing AML requirements, these requirements include establishing a client’s authority in
relation to use of client monies. An engagement letter may be used to do this. In this situation the
engagement letter must include the matters required by PS-2, and in particular matters such as:
(a) the intended use(s) or purpose(s) for holding or receiving the client monies and/or operating a client
bank account;
(b) establishing a general authority for use of client monies and/or operating a client bank account subject
to client directions;
(c) establishing the process for obtaining client directions;
(d) the arrangements for payment to the member or firm for professional fees and disbursements including,
where they are to be drawn from the trust account / client account if applicable, the process for
obtaining the client’s authorisation for withdrawal of fees and/or disbursements by the member or firm
from the client’s trust account or client bank account when due.

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Engagement letter tool

➢ Please send any feedback on this tool to

Use of this tool and disclaimer

Engagement letter tool: FAQs

Why do I need an engagement document?

How does this tool work?

Read the guidance and questions

Use this to select appropriate

Create a tailored engagement

Why a letter plus terms & conditions?

• The engagement letter will include information specific to the engagement.

What are the rules?

How does the Code of Ethics impact the terms of engagement?

What about the standards for specific types of engagements?

What do I need to include if I am a tax agent?

When do I need to issue a new or amended engagement document to my client?

How can I mitigate the risk of later disputes with clients?

Build your engagement document

Guidance: consider whether the party you are contracting with

User instructions and guidance Suggested content/wording

 Insert any background information necessary to ensure Background

 Amend this paragraph so it is suitable for period of the Period of engagement

 Amend this paragraph as necessary to adequately describe Scope of services

User instructions and guidance Suggested content/wording

User instructions and guidance Suggested content/wording

Guidance: Your agreement

Guidance: Yours sincerely

Part 2: Terms and conditions

User instructions and guidance Suggested content/wording

If we are acting for a business, and we receive conflicting

User instructions and guidance Suggested content/wording

 Include the section on audit (highlighted in yellow) if 4. Your responsibilities

Guidance You authorise us to approach such third parties as may be

Our services are limited exclusively to those you have

Where our engagement is recurring, we may amend our

User instructions and guidance Suggested content/wording

7. Investment and financial advisory advice

User instructions and guidance Suggested content/wording

 Amend to reflect your billing terms. 10. Fees and payment

User instructions and guidance Suggested content/wording

Unless otherwise agreed to the contrary, our fees do not

We may charge interest on late paid invoices at the rate of

We may also suspend our services or to cease to act for you

User instructions and guidance Suggested content/wording

Guidance 13. Disclosure permissions

User instructions and guidance Suggested content/wording

[insert any other terms that are required]

Guidance 16. Limitation of liability

17. Limitation of third party rights

User instructions and guidance Suggested content/wording

Guidance 19. Communication

“We would like to send you promotional material and news

You will also need to ensure that a working unsubscribe

20. Applicable Law

User instructions and guidance Suggested content/wording

Guidance 23. Outsourcing

Appendix 1 Summary of engagement letter requirements