Engagement letters — what to negotiate before fieldwork

Fieldwork should not begin on a handshake. An engagement letter sets the reporting framework, the period covered, fee and deposit terms, and the access auditors need to books and warehouses.

Scope language that matters

Name the entities included, the financial statements subject to audit or review, and whether consolidations are in scope. Ambiguity here is how mid-engagement surprises appear — a forgotten subsidiary, an unexpected inventory location, or a grant schedule nobody listed.

Access and timing

The letter should state when prepared-by-client schedules are due and what happens if they arrive late. It should also note whether inventory observation requires weekend access and who pays travel outside the prefecture.

Fees and refunds

Deposits, progress billing, and cancellation terms belong in the letter, aligned with our refund policy. Negotiate reporting deadlines only after you know when your own books will actually close; an auditor cannot compress substantive testing indefinitely to meet a lender date chosen before the trial balance exists.