A finished ACC-663 Topic 1 advisory engagement letter example, defining scope, excluded services, each party's responsibilities and the objectivity disclosure a return preparer owes before advising the same household. Searches like "acc 663 topic 1 assignment example", "acc663 topic 1 sample" and "acc-663 topic 1 example" land here.
What a finished ACC-663 Topic 1 advisory engagement letter looks like
The finished letter is addressed to both spouses, since either may later rely on the advice. Its scope paragraph lists four areas: cash flow and debt, tax consequences of the household's choices, retirement funding and insurance needs. Estate documents are listed as coordination only, with drafting left to the couple's attorney, and the selection of specific securities is excluded outright, because that work can carry registration requirements the firm does not hold. A responsibilities section asks the couple to supply complete records and to report changes, and states that the CPA will not verify what they provide. The objectivity paragraph discloses the existing tax relationship, confirms the firm takes no commissions on products, and says how a conflict arising later would be handled. Fees are described by basis, not amount.
How an ACC-663 Topic 1 example is structured
The letter is ordered so that the limits arrive before the promises. It opens with a paragraph naming the clients, the firm and the purpose, a written plan covering the four areas in scope. The scope section follows as a list, and beside it a second list of services the engagement excludes, each with the professional who would handle it instead. How the work proceeds is set out after that: data gathering, analysis, a written recommendation, and a meeting to explain it, with implementation left to the couple unless a later letter adds it. The responsibilities section divides duties between the clients and the firm. The objectivity and conflicts paragraph comes after, referring to the AICPA's professional conduct rules on integrity and objectivity. A closing paragraph covers fees, termination by either side and the date the scope will be reviewed, followed by signature lines for both spouses.
Scope listed beside its exclusions
Four advisory areas sit on one side and the excluded services on the other, so neither spouse can read a promise into what was left unsaid.
Securities selection excluded, with a reason
The letter declines to recommend specific investments, noting that such advice can require separate registration, and refers that work to a registered adviser if the couple wants it.
Client responsibilities stated in writing
The couple agrees to supply complete statements and report changes such as a job loss, and the letter says plainly that the firm relies on those records unverified.
The existing tax relationship disclosed
Because the same firm prepares the return, the letter names that relationship, confirms no commissions are received, and explains how a later conflict would be raised with both spouses.
Implementation left outside the first engagement
Opening accounts, changing beneficiaries and buying cover stay with the couple unless a second letter extends the scope, which keeps responsibility for each action clear.
Where marks go in ACC-663 Topic 1
Scope written so broadly that it promises everything is the costliest flaw in this letter, since advice later given on any subject then falls inside a duty the firm never priced or staffed. Letters that leave out an exclusions list invite the reading that estate drafting or investment selection was included. A missing objectivity paragraph is marked hard in many sections, because a CPA who already prepares the return and then recommends a strategy affecting it has a relationship the clients should see in writing. Papers that call this an independence problem misapply the term, which the AICPA rules attach to attest engagements, while the operative questions here are objectivity and conflicts of interest. Responsibilities assigned only to the firm leave the clients' duty to disclose unstated. Addressing one spouse alone ignores that both will act on the plan.
Get an ACC-663 Topic 1 example written to your instructions
Send the ACC-663 Topic 1 instructions, your classroom rubric and the client scenario your section uses. We write a custom example to them, with scope and exclusions listed side by side, responsibilities divided and the objectivity disclosure drafted for the facts, returned in 24 to 48 hours. The first one is free, and it is coursework support, not financial advice.
ACC-663 Topic 1 questions, answered
Why does an advisory engagement need its own letter?
Because the return engagement already on file covers preparing a return, not advising on retirement, insurance or tuition. Advice given without a new letter has no agreed scope, so a client can later claim the adviser undertook more than was intended. A separate letter fixes what is included, what is excluded and who does what, which protects both the household and the firm.
Is independence the issue when the CPA also prepares the return?
Not in the technical sense. Under the AICPA's conduct rules, independence is required for attest work such as audits and reviews, and a tax return is not attest work. The questions that do apply are integrity, objectivity and conflicts of interest: whether the adviser's judgment could be affected by the existing relationship, and whether the clients have been told about it.
Why exclude specific investment recommendations?
Recommending particular securities can bring a practitioner within securities-law registration requirements, and many CPA firms are not registered for that work. Excluding it in writing keeps the engagement within the firm's competence and lets the plan still address asset allocation in general terms. The letter names who would handle the excluded work if the couple wants it done.