Friday, March 2, 2012

The Audit Engagement Letter

Parsley Sage Rosemary & Ginsburg llp
“always a reasonable result for a reasonable fee, always”

Learned H. Sage, Managing Partner
Accounting Department
Mike Marget
March 2, 2012
The Auditors are Coming!  – Engagement Letter

 We have made all of the final accounting entries for 2012, subject to examination of the financial statements by our independent accounting firm, Beane & Beane, CPAs. 

Attached is a copy of their formal Engagement Letter.  I’ve already negotiated the fee with them – no increase again this year, but the Accounting Department is going to prepare a couple extra schedules which their staff used to create from scratch in the past.  It’s a fair trade.

The letter is not dissimilar to the engagement letters PSRG uses – except Beane & Beane insists upon us signing it before they begin work and the payment schedule is outlined in detail.  (Things we should consider getting stricter about.)

As a technical matter, Beane & Beane should be formally retained by the firm’s Management Committee.  Accordingly, I will put this subject on the agenda for this month’s Management Committee meeting and attach a copy for everyone to review.  The minutes of the meeting should reflect the Committee’s action.  It is something the auditors look for when they review the Committee meeting minutes each year.

Let me know if you have any questions.