# Financial statement preparation engagement letter under AR-C 70 [Home](/) / [Engagement letter templates](/templates/engagement-letters) / Financial statement preparation By [Arthur Teboul](/authors/arthur-teboul), Founder, DokuTrak. Published 2026-11-05, updated 2026-11-05. > **In brief:** A preparation engagement letter is the signed agreement in which a CPA agrees to prepare a client’s financial statements from management’s records, with no report and no assurance. The SSARS require it in writing and signed by both sides, and it must say how the statements will show that no assurance is provided. ## The template: Financial statement preparation engagement letter **Not advice.** This page is general information, not tax, legal or HR advice. Rules change: check the cited source and ask your own professional before you rely on it. Last reviewed October 25, 2026. Replace each [placeholder]. Keep the disclosures clause that matches management’s choice and the scope note only for advisory clients. Have counsel review the template once before you use it. ```text [Firm name] [Firm address] [Date] [Owner or manager name] [Company legal name] [Company address] Re: Preparation of [monthly / quarterly / annual] financial statements Dear [Owner or manager name], What we will prepare We will prepare the [balance sheet and income statement / full set of financial statements] of [Company legal name] for [each month beginning (month, year) / the year ending (date)], in accordance with [the cash basis / the income tax basis / accounting principles generally accepted in the United States of America], based on information you provide. Our responsibilities We will prepare the statements under Statements on Standards for Accounting and Review Services, AR-C 70. We will not verify the accuracy or completeness of the information you provide, and we will not gather evidence to express an opinion or a conclusion. What this engagement is not This is not an audit, a review or a compilation. We will provide no opinion, conclusion or assurance of any kind on the statements, and our work cannot be relied on to detect errors, fraud or noncompliance with laws. The no-assurance statement You agree that each page of the statements will carry the words “No assurance is provided on these financial statements.” If that statement cannot appear on each page, we will issue a disclaimer that makes clear no assurance is provided, or we will withdraw. Disclosures and departures (optional) [You have chosen to omit substantially all disclosures required by (framework); the statements will say so.] / [The statements will include the following known departure from (framework): (describe), which the statements will disclose.] Your responsibilities You are responsible for choosing the framework; for internal control over the records and statements; for preventing and detecting fraud; for the company’s compliance with laws and regulations; for the accuracy and completeness of the records, documents, explanations and significant judgments you give us; and for access to anyone we need to ask. Records and timing By the [number] business day after each period end you will send: bank and credit card statements for every account; loan and mortgage statements; your receivable and payable lists; and invoices for asset purchases over $[amount]. We will deliver the statements within [number] business days after we receive the last item. Missing items will be noted on the statements or will delay them, as we agree at the time. Scope note for advisory clients (optional) These statements are [the primary objective of this engagement and are prepared under AR-C 70] / [prepared as part of our advisory services under the AICPA consulting standards, CS 100, and AR-C 70 does not apply to them]. Other services Bookkeeping, payroll and tax return preparation are separate services under separate terms. Any adjusting entries we propose are yours to accept or reject. Who may use the statements The statements are for your use. If you give them to a lender or another third party, you will give them with the no-assurance statement on each page. Fees and ending the engagement Our fee is [amount] per [month / quarter / year], billed [schedule] and payable within [number] days. Either of us may end this engagement with [number] days’ written notice. Your signature Please sign and date this letter where shown and return it to us. Work begins when we receive the signed copy. With thanks, [Firm name] [Accountant name], CPA Signature: ____________________ Date: __________ Accepted for [Company legal name] by [Owner or manager name], [Title] Signature: ____________________ Date: __________ ``` Download: [Word](https://dokutrak.com/downloads/pseo-v2/f2-engagement-letters/financial-statement-preparation.docx) · [PDF](https://dokutrak.com/downloads/pseo-v2/f2-engagement-letters/financial-statement-preparation.pdf) ## Financial statements, not tax returns Searches for a “preparation engagement letter” mix two different jobs. This page covers the preparation of **financial statements** under AR-C 70, the service SSARS 21 created ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). A tax return preparation letter follows other rules and belongs on a separate letter. A **preparation engagement** is an engagement in which the accountant prepares financial statements using the records, documents and explanations management provides, and issues no report on them ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). It is a nonattest service, so it does not require a determination about independence ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). That makes it a common fit when the accountant also keeps the books, though for an audit, review or compilation client it is still subject to the AICPA nonattest rules ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). The work still follows a standard. That is why the letter has required terms, even for a set of monthly statements the owner reads alone. The **financial reporting framework** is the set of rules the statements follow, such as U.S. GAAP, the cash basis or the income tax basis. Management selects it, and the letter names it. A cash-basis set for an owner and a GAAP set for a bank are different jobs, so write the framework before anything else. ## The seven terms AR-C 70 requires AR-C 70 lists what the written agreement must include, and the list runs to seven items ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Map each item to a clause before you send the letter. | Required term | Where it sits in the template | | --- | --- | | The objective of the engagement | What we will prepare | | Management’s responsibilities from AR-C 60 ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)) | Your responsibilities | | Management’s agreement to the no-assurance legend on each page, or a disclaimer instead | The no-assurance statement | | The accountant’s responsibilities | Our responsibilities | | The limitations of the engagement | What this engagement is not | | The applicable financial reporting framework | What we will prepare | | Known departures from the framework, or omitted disclosures | Disclosures and departures | ## The no-assurance legend and omitted disclosures The **no-assurance legend** is the line printed on each page of the statements, saying at a minimum that no assurance is provided ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Management agrees to it in the letter. If the legend cannot go on each page, the accountant issues a disclaimer that makes clear no assurance is provided, or withdraws ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Management may also choose to leave out substantially all the disclosures the framework requires, or to accept a known departure, such as expensing small asset purchases under a GAAP framework. The letter must say whether either applies ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). The statements then disclose the omission or the departure, so a reader is not misled. ## When AR-C 70 does not apply: SSARS 27 and CAS work Client advisory services often include monthly statements as one output among many. SSARS 27 makes explicit that AR-C 70 does not apply to statements prepared as part of a consulting engagement under CS 100 ([AICPA, SSARS 27: Clarifying the application of AR-C 70 to CAS engagements](https://www.aicpa-cima.com/resources/article/ssars-27-clarifying-the-application-of-ar-c-70-to-cas-engagements)). The amendment applies to periods ending on or after December 15, 2026 ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). The test is the primary objective. If the client hired you to prepare statements, AR-C 70 applies ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). If the client hired you to advise on cash, pricing or growth, and statements are a by-product, the consulting standard may govern instead ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Say in the letter which one applies. That one sentence settles what the deliverable is and which standard a peer reviewer will read it against. ## Records, cut-off and the monthly cycle Preparation work lives on the client’s records, so the letter should name them and set a cycle. Ask for bank statements first, because everything else reconciles to them. The IRS tells business owners to make sure the bank statement, the checkbook and the books agree each time a statement arrives ([IRS Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583)). For monthly work, set the day records are due and the day statements go out. Say what happens when a statement or a loan balance is missing: the statements wait, or go out with the item flagged. Put the capitalization policy in writing too. Small purchases, such as a laptop or a printer, can be expensed or added to fixed assets, and the client should know which and why. One line in the letter saves a monthly email thread. Last, name who answers questions. Preparation depends on management’s explanations, and the standard puts their accuracy on management ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Give one contact and a reply time, so a single open question does not hold up the month. - The bookkeeping file or trial balance, closed for the period. - Bank and credit card statements for every account, for each month. - Loan and mortgage statements with the period-end balance. - Customer receivable and vendor payable lists. - Invoices for fixed asset purchases above your capitalization policy. ## Questions people ask ### Does a financial statement preparation engagement need a signed letter? Yes. AR-C 70 requires the terms in an engagement letter or other written agreement, signed by the accountant or firm and by management or those charged with governance ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). ### Must each page of prepared statements say no assurance is provided? Yes, at a minimum each page must say that no assurance is provided. If that is not possible, the accountant issues a disclaimer making it clear, or withdraws ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). ### Does the accountant need to be independent to prepare financial statements? No. Preparing financial statements is a nonattest service and does not require a determination about independence ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). ### How is a preparation letter different from a compilation letter? A compilation ends with a compilation report and its letter describes that report; a preparation has no report and its letter covers the no-assurance legend instead ([AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective)). Neither gives assurance. ## Sources - [AICPA SSARSs, AR-C 60 and AR-C 70 Preparation of Financial Statements](https://www.aicpa-cima.com/resources/download/aicpa-ssarss-currently-effective): AR-C 70 lists the terms of a preparation engagement letter, requires signatures, requires the no-assurance statement on each page, treats preparation as a nonattest service, and was amended by SSARS 27 for periods ending on or after December 15, 2026. - [AICPA, SSARS 27: Clarifying the application of AR-C 70 to CAS engagements](https://www.aicpa-cima.com/resources/article/ssars-27-clarifying-the-application-of-ar-c-70-to-cas-engagements): SSARS 27 explicitly excludes financial statements prepared as part of a consulting services engagement under CS 100 from AR-C 70. - [IRS Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583): When the bank statement arrives, the business should make sure the statement, the checkbook and the books agree. ## More on this topic - [Compilation engagement letter](/templates/engagement-letters/compilation) - [Review engagement letter](/templates/engagement-letters/review) - [AICPA engagement letter templates](/templates/engagement-letters/aicpa-templates) - [Client documents for bookkeepers](/for/bookkeepers) - [Year-End Checklist for Accounting: Close the Year](/checklists/year-end-close) - [Small Business Year End Checklist: Books, Tax, 1099s](/checklists/year-end-close/small-business) ## About the author Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. [Arthur Teboul](/authors/arthur-teboul). How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? [Contact us](/contact). ## Ask once. DokuTrak does the chasing. - Your client uploads from one link, with no account and no password. - Reminders go out on a schedule, by default 2, 5, 10 and 14 days after the request, until the file arrives. - You accept every file or mark it for re-upload, and your client gets the note by email. The AI never accepts a file. 14-day free trial, no card. Add one only to keep going. [Request these documents with DokuTrak](https://app.dokutrak.com/sign-up?docs=bank-statement%2Ccredit-card-statement%2Cmortgage-statement%2Cinvoice)