Review Engagement Letter Template for the United States

A Review Engagement Letter is an essential document that establishes the terms and conditions for review services between you and your accounting firm. This letter creates a binding professional relationship while ensuring compliance with United States accounting standards, including Statements on Standards for Accounting and Review Services (SSARS) and AICPA Professional Standards.

When do you need this document?

You need a Review Engagement Letter when your business requires financial statement review services that provide limited assurance. This typically occurs when banks, investors, or creditors request reviewed financial statements for loan applications, investment decisions, or ongoing compliance requirements. Companies often choose review services as a cost-effective alternative to full audits while still providing stakeholders with professional accountant assurance. Private companies, non-profit organizations, and partnerships commonly use review engagements for annual financial reporting, especially when they need more credibility than compiled statements but cannot justify the expense of a full audit.

Key legal considerations

Your Review Engagement Letter must clearly define the scope and limitations of review services to avoid misunderstandings about the level of assurance provided. The document should specify that a review provides limited assurance and is substantially less in scope than an audit, meaning the accountant will not express an audit opinion. Management responsibilities must be detailed, including your obligation to provide complete and accurate financial information, maintain adequate internal controls, and acknowledge responsibility for preventing and detecting fraud. The letter should address professional liability considerations, including indemnification clauses, limitation of liability provisions, and compliance with state-specific statute of limitations requirements. Data protection and confidentiality provisions are crucial, especially regarding compliance with the Gramm-Leach-Bliley Act and applicable state privacy laws.

Legal requirements in United States

Under United States law, Review Engagement Letters must comply with SSARS standards, specifically AR-C Section 90, which governs review engagements for non-public entities. The letter must reference applicable AICPA Professional Standards and Code of Professional Conduct requirements. State Board of Accountancy regulations vary by jurisdiction and may impose additional engagement letter requirements, so you must ensure compliance with your specific state's CPA regulations. For certain entities, federal requirements may apply, including Sarbanes-Oxley Act provisions and Internal Revenue Code considerations. The engagement letter must be signed before commencing review procedures and should be updated for any changes in engagement scope or terms. State contract law principles govern the enforceability of engagement letter terms, including professional liability limitations and dispute resolution procedures.