Cessation of Engagement letter to client going to a new accountant - are these common?

A new client (non audit, personal and trust tax client) has received a Cessation of Terms of Engagement letter from their previous accountants, with the request that they sign the three page document indicating their agreement.

One of the paragraphs states ' you agree to hold harmless and indemnify us against and representation, whether intentional or unintentional, supplied by us orally or in writing in connection with this agreement. You have agreed that you will not bring any claim in connection with services provided to you by the firm against any of our employees on a personal basis.'

There are three other paragraphs in this general vein under the heading of Limitation of Liability.

My questions:

Are these letters becoming common, or even recommended best practice by the professional bodies?

Presumably the advice to the new client should be to ignore it and don't send it back?! I've read it a few times and am still not very clear about what it's trying to say, but the overriding impression is that signing it can only reduce the new client's rights.


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No need to sign

Ken Howard |

Use of disengagement letters

Flash Gordon |
Flash Gordon's picture

Disengagement letters

Locutus |
Locutus's picture

Disengagement letters

Jimess |

go further

nkwayne |

proper use

nkwayne |