A “Sample Letter To Predecessor Accountant Review Engagement” is a formal request. It’s sent by a new accountant to the previous one. The purpose? To gather information about a client. This helps the new accountant start a review engagement smoothly.
Need to write such a letter? You’re in the right place. We know drafting these can be tricky. That’s why we’ve created helpful templates.
This article provides sample letters. Use them as a guide. Tailor them to your specific needs. Make the process easier.
Sample Letter To Predecessor Accountant Review Engagement
**Sample Letter To Predecessor Accountant Review Engagement**
[Date]
[Predecessor Accountant’s Name]
[Predecessor Accounting Firm]
[Address]
**Subject: Review Engagement of [Client Name]**
Dear [Predecessor Accountant’s Name],
[Client Name] has appointed our firm, [Your Accounting Firm], to perform a review of their financial statements for the period ending [Date].
As part of our standard procedures, we are writing to you, as the predecessor accountant, to request certain information that will assist us in completing our engagement.
We would appreciate it if you could provide us with the following:
* Any information regarding disagreements with management about accounting principles, auditing procedures, or other significant matters.
* Your understanding of the reasons for the change in accountants.
* Any information about fraud, illegal acts, or internal control weaknesses.
We would also like to request access to your working papers related to the prior year’s engagement.
Please let us know if you require client consent to release this information. We have already obtained client authorization for you to communicate with us.
We appreciate your cooperation in this matter. Please contact us if you have any questions.
Sincerely,
[Your Name]
[Your Title]
[Your Accounting Firm]
[Contact Information]
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How to Write Letter To Predecessor Accountant Review Engagement
Subject Line: The Overture
- Keep it succinct and professional.
- Specify the client’s name and the engagement type. A subject like “Review Engagement – [Client Name] – Request for Information” is apt.
- Avoid ambiguity; clarity is paramount.
Salutation: A Cordial Beginning
- Address the predecessor accountant by name if known, erring on the side of formality: “Dear Mr./Ms. [Accountant’s Last Name]”.
- If the name eludes you, “Dear Predecessor Accountant” is an acceptable alternative.
- Maintain a respectful, courteous tone.
Introduction: Laying the Groundwork
- Identify yourself and your firm.
- State that you have been engaged to perform a review engagement for the client.
- Explicitly mention that the client has granted permission for you to communicate with the predecessor accountant.
- A phrase such as, “We have been engaged by [Client Name] to perform a review engagement for the fiscal year ending [Date], and they have authorized us to contact you regarding this matter,” sets the stage effectively.
Information Request: The Nitty-Gritty
- Clearly and concisely enumerate the specific information you require.
- This may encompass access to prior year working papers, understanding of significant accounting policies, or any known material misstatements or fraud.
- Be precise: instead of asking for “all relevant documents,” specify “prior year’s trial balance, adjusting journal entries, and management representation letter.”
- Indicate the timeframe for needing the information to facilitate a timely review.
Confidentiality and Reliance: Setting Expectations
- Acknowledge that any information gleaned from the predecessor accountant will be treated with utmost confidentiality.
- Clarify that the information obtained will be used solely for the purpose of the review engagement.
- Express that the review will not supplant the predecessor’s audit, if one exists.
- Include a statement like, “We understand that any information you provide is confidential, and we assure you it will be used solely for the purpose of completing our review engagement. We will not be relying upon your work to take the place of an audit.”
Contact Information and Gratitude: Facilitating Dialogue
- Provide your complete contact information, including phone number and email address.
- Extend gratitude for their anticipated cooperation.
- Acknowledge the value of their insights into the client’s accounting practices.
- For example, “Thank you in advance for your time and assistance. Your insights into [Client Name]’s financial history are greatly appreciated. Please do not hesitate to contact me at [Phone Number] or [Email Address] if you require any further clarification.”
Closing: A Professional Farewell
- Use a professional closing such as “Sincerely” or “Best regards”.
- Follow this with your name, title, and firm name.
- Ensure the letter is signed, either physically or electronically.
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Frequently Asked Questions: Sample Letter to Predecessor Accountant for Review Engagement
This section addresses common inquiries regarding the sample letter used to request information from a predecessor accountant in connection with a review engagement.
Understanding the protocol and necessity of this communication is crucial for a smooth transition and ethical practice.
1. Why is a letter to the predecessor accountant necessary?
Contacting the predecessor accountant is a professional courtesy and a requirement to gather information relevant to the integrity of the financial statements under review, aiding in assessing potential risks and inconsistencies.
2. What key information should be requested in the letter?
The letter should request information about the integrity of management, disagreements with management regarding accounting principles, communications with those charged with governance, and any known fraud or non-compliance with laws and regulations.
3. What if the predecessor accountant does not respond?
If there is no response, document the attempts to communicate and consider the implications for the review engagement. Consult with professional standards or legal counsel if necessary.
4. Is client permission required before contacting the predecessor accountant?
Yes, explicit permission from the client is required before initiating contact with the predecessor accountant to comply with confidentiality regulations and professional ethics.
5. What if the predecessor accountant reports serious concerns?
Serious concerns should be thoroughly investigated and considered in the risk assessment for the review engagement, potentially impacting the scope and procedures performed.