Free CPA Engagement Letter Template
This CPA engagement letter template covers the terms a US firm needs before work starts: scope, fees, client responsibilities, deliverables, limitations, records retention and termination. The full text is below, with an explanation of each section and a download.
This CPA engagement letter template covers the terms a US firm needs before work starts: scope, fees, client responsibilities, deliverables, limitations, records retention and termination. The full text is below, with an explanation of each section and a download.
Last updated: September 2026
What is included in this template?
- Parties, effective date and the period the engagement covers
- A specific scope of services, written so both sides can tell what is excluded
- Fee basis, billing frequency and payment terms
- Client responsibilities, including the completeness and accuracy of information supplied
- Limitations, including that the engagement is not designed to detect fraud
- Records retention and file ownership
- Termination and dispute resolution
- Signature blocks for the firm and the client
When should you use it?
- Before any new client engagement begins, without exception.
- Annually for recurring clients, even where nothing has changed.
- Whenever scope changes materially mid-year, such as adding entity returns or advisory work.
- When the responsible officer, owner or entity structure on the client side changes.
Section-by-section explanation
What each part is for, and the mistakes that show up most often when it is written badly.
Scope of services
The most common cause of fee disputes is not price but scope. Name the services, the periods covered and, just as importantly, what is not included. 'Preparation of the 2026 Form 1120S' is defensible; 'tax services' is not.
Client responsibilities
Record that management is responsible for the accuracy and completeness of the records provided, for maintaining internal controls, and for the adoption of sound accounting policies. This is the section your carrier will look for.
Fees and billing
State the fee basis, when invoices are issued, payment terms and what happens if payment is late. If work is stopped for non-payment, say so here rather than raising it for the first time in an email.
Limitations
State plainly that the engagement is not designed to detect fraud, error or illegal acts, and that you will rely on information provided without independent verification unless the engagement says otherwise.
Termination
Set out notice on both sides and confirm that fees for work performed remain payable. Attach the records-return position to this section so it is settled while the relationship is still good.
The full template
The complete text is below so you can read it before downloading. Replace everything in square brackets with your own details.
[FIRM LETTERHEAD]
[DATE]
[CLIENT NAME]
[CLIENT ADDRESS]
Dear [CLIENT CONTACT NAME]:
ENGAGEMENT LETTER — [SERVICE DESCRIPTION], [PERIOD]
Thank you for choosing [FIRM NAME] ("we", "us", "the Firm"). This letter confirms the terms of our engagement with [CLIENT NAME] ("you", "the Client") and the nature and limitations of the services we will provide.
1. SCOPE OF SERVICES
We will provide the following services for the period [PERIOD START] to [PERIOD END]:
a. [SERVICE 1, e.g., preparation of the federal Form 1120S and related schedules]
b. [SERVICE 2, e.g., preparation of the [STATE] corporate income tax return]
c. [SERVICE 3]
Services not listed above are outside the scope of this engagement. This includes, but is not limited to, representation before the Internal Revenue Service or any state agency, tax planning or advisory work, bookkeeping, payroll filings, audits, reviews and compilations. Additional services will be the subject of a separate written engagement or an addendum to this letter, and will be billed separately.
2. CLIENT RESPONSIBILITIES
You are responsible for:
a. providing complete and accurate information, records and documentation on a timely basis;
b. the substance and accuracy of all information supplied to us, including all representations made to us;
c. maintaining an adequate system of internal control and safeguarding assets;
d. the adoption of sound accounting policies;
e. management decisions and the acceptance of responsibility for the results of the services;
f. reviewing and approving all deliverables before they are filed or relied upon.
You agree to provide all requested information by [DATE OR NUMBER] days before the applicable due date. Where information is provided after that point, we cannot guarantee completion by the filing deadline and an extension may be necessary.
3. FEES AND BILLING
Our fee for the services described above is [FEE BASIS: fixed fee of $[AMOUNT] / hourly at $[RATE] per hour / monthly fee of $[AMOUNT]].
Invoices are issued [FREQUENCY] and are payable within [NUMBER] days of the invoice date. Out-of-pocket costs such as filing fees and third-party charges are billed in addition.
If an invoice remains unpaid for more than [NUMBER] days, we may suspend work on this and any other engagement until the balance is settled. Work suspended for non-payment may result in missed deadlines, and the resulting consequences are the Client's responsibility.
4. DELIVERABLES AND TIMING
We will deliver [DELIVERABLE LIST] by [DATE OR RELATIVE TIMING], provided that all requested information has been received by the date stated in section 2.
5. LIMITATIONS
Our engagement cannot be relied upon to disclose errors, fraud, theft or other illegal acts that may exist. We will inform you of any such matters that come to our attention. We will rely on the information you provide without independent verification unless expressly stated otherwise in section 1.
We do not provide legal advice. Where a matter requires legal interpretation, you should consult your attorney.
6. TAX POSITIONS AND PENALTIES
Where a tax position is uncertain, we will discuss it with you and you will decide the position to be taken. You remain responsible for any tax, interest or penalty assessed by any taxing authority.
7. RECORDS AND RETENTION
Working papers and files prepared by us remain our property. We will retain records relating to this engagement for [NUMBER] years, after which they may be destroyed without further notice. Original documents supplied by you will be returned on request.
8. CONFIDENTIALITY AND DATA SECURITY
We will keep your information confidential except where disclosure is required by law, professional standards or with your consent. We maintain a written information security program addressing the safeguarding of client information.
9. TERMINATION
Either party may terminate this engagement on [NUMBER] days' written notice. Fees for services performed and costs incurred through the date of termination remain payable.
10. DISPUTE RESOLUTION
Any dispute arising from this engagement will first be submitted to mediation in [STATE]. This agreement is governed by the laws of the State of [STATE].
11. ACCEPTANCE
If the terms above reflect your understanding, please sign and return a copy of this letter.
Sincerely,
_______________________________
[PARTNER NAME], [CREDENTIAL]
[FIRM NAME]
ACCEPTED AND AGREED:
_______________________________ ____________________
[CLIENT SIGNATORY NAME], [TITLE] Date
[CLIENT NAME]Download the editable copy
Enter your work email and the plain-text file downloads straight away. Have your own counsel review any engagement or disengagement letter before you send it to a client.
This template is a starting point, not legal advice. Have your own attorney and, where relevant, your insurance carrier review any engagement or disengagement letter before you send it to a client.
How Remindoo automates this
A template is a document. The reason firms still miss the thing the document describes is that nobody owns the follow-up. This is where software helps.
- Build the letter once as a white-label proposal template with merge fields for client name, scope, fee and period.
- Send for electronic signature from the client record, so the executed copy files itself against the client rather than sitting in an inbox.
- Set an annual renewal task per client so letters are reissued before the next cycle starts instead of after it.
- Trigger the onboarding workflow automatically when the letter is signed, so scope, fee and start date flow into the job rather than being re-keyed.
Related templates
Frequently asked questions
What must a CPA engagement letter include?
At minimum: the parties, the services and periods covered, what is excluded, client responsibilities for the accuracy of information, the fee basis and payment terms, limitations on detecting fraud, records retention, termination terms and signature blocks for both sides.
Is an engagement letter legally required?
Requirements vary by service and by state, and professional standards address engagement documentation for several service types. Practically, malpractice carriers expect one for every engagement. Confirm your own obligations with your state board and your carrier.
Can one engagement letter cover multiple services?
Yes, provided each service and period is named specifically. The risk with a combined letter is vagueness. If the list starts turning into general phrases like 'tax and accounting services', split it into separate letters.
Does an engagement letter have to be signed?
A countersigned letter is far easier to rely on if fees or scope are later disputed. Electronic signature is standard practice in US firms. Keep the executed copy with the client record rather than in an individual's email.
How often should engagement letters be reissued?
Annually for recurring services, and immediately whenever scope, fees or the responsible parties change. Reissuing yearly also gives you a clean moment to reprice work that has quietly grown.
Stop maintaining templates by hand
Remindoo turns documents like this into recurring work with owners, internal due dates and automatic client follow-up. Per client, unlimited users.