In his column with the Pennsylvania CPA Journal, Jonathan S. Ziss, chair of Goldberg Segalla’s Management and Professional Liability practice, discusses how many accountants, auditors, and other professionals found themselves caught off guard by client demand during the global pandemic, providing pandemic-related client services without sending formal engagement letters.
Stressing the importance of engagement letters to economic-relief-related work, Jonathan explains the basics of creating engagement letters and how they can be critical for practitioners with audit and attestation practices. He adds that every attorney should have a general engagement letter template on hand.
“A primary purpose of an engagement letter is to confirm what you were hired to do,” Jonathan writes. “Put another way, what are a client’s fair expectations, and, correspondingly, what should the limits of those expectations be? With an engagement letter, expectations are free to roam where they will and elude limitation. Misunderstanding are perhaps unavailable, but in the absence of an engagement letter scope-of-work misunderstandings become more the rule than the exception.”
“Engagement Letters for Consulting Never More Important,” Pennsylvania CPA Journal, Fall 2020
Jonathan S. Ziss devotes much of his practice to the representation of professionals, including accountants, attorneys, bankers, design professionals, insurance agents/brokers, directors and officers, and fiduciaries, in administrative and civil proceedings. He has represented many local, regional and national accounting firms in a wide variety of matters and in a number of forums, including all forms of ADR. In professional negligence matters, he has represented accountants in lawsuits brought by former clients; by purchasers or sellers in disputes arising out of business combinations; by factors, banks, and other lenders; by creditors in bankruptcy and bankruptcy trustees; and by other affiliated professionals. In addition, Jonathan is frequently called upon to represent accountants in investigations by federal, state, and local authorities, including the Internal Revenue Service, the FBI, and the Department of Labor, as well as investigations by bankruptcy trustees and creditors’ committees. He has worked with accounting firms preparing for grand jury appearances.