What should an accountant’s disengagement letter contain?
Most accountants will find a need to write a letter of disengagement sooner or later. The need for such a letter could be as simple as an engagement outside your area of practice resulting in an amicable parting of the ways. Or the letter could be necessitated by something more emotional, such as a lack of cooperation by the client, unpaid fees, or a fraudulent activity exposing you to liability.
Here are some points to consider when you are drafting
such letters:
- State what services you were engaged to perform and make clear that you are not completing those services.
- State the reason for the disengagement.
- Get an acknowledgement that all work papers are the property of your firm.
- Get an acknowledgement that you have returned all documents provided by the client.
- State that you will cooperate with a replacement accountant as needed for an appropriate fee.
- If the engagement included time deadlines (financial statements for loans, tax filing deadlines, etc.), be sure to specify that the client needs to act swiftly to secure a replacement accountant to handle unfinished projects and filing deadlines.
- The disengagement letter should not be emotionally charged.
- Inform the client of any unpaid invoices due for your fees and the expected payment schedule.
- Provide the client with a contact name within your firm for any future correspondence so that all information goes through one person.
This checklist covers the basics of your disengagement letters, but the specifics of your client’s engagement will dictate the final content of each letter. Consider having your letter reviewed by your attorney and your professional liability insurance company.
I invite your comments and questions. Contact me at mostad[at]mostad[dot]com or 1-800-654-1654.