Tip of the month: engagement letters.

• Position: GAMIC insurance - Brief article

Engagement letters generally limit the scope of your work and services, rather than selling your services.Wording such as, "We are particularly suited for this type of work" is appropriate for a proposal letter, but not for an engagement letter. If you accept work as the result of a proposal letter, your engagement letter should not deviate from the terms in your proposal letter, though the proposal letter can give your engagement letter the final word by stating, The terms of the engagement will be defined in more detail in an engagement letter."

An engagement letter defines the scope of the engagement--what you wilt and won't do. Because it limits the scope of your work, the letter should not include superlatives, absolutes, all-encompassing language and words that expand, rather than contract, your responsibility.

Avoid words such as: "absolute," "all," "any," "audit (never use in non-audit engagements unless to state, -This engagement is not an...