Because reviews, compilations, and preparation services provide the accountant with less assurance than audits, the accountant should establish an understanding with the client about the services to be performed through a written engagement letter.

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It is true that the accountant should establish an understanding with the client about the services to be performed through a written engagement letter for reviews, compilations, and preparation services, as they provide less assurance than audits. The engagement letter helps to document the scope and limitations of the services, the responsibilities of the accountant and the client, the expected deliverables, and the fees to be charged. It helps to avoid misunderstandings, disputes, and legal liabilities.

Because Reviews, Compilations, and Preparation Services Provide the Accountant with Less