What it is
A proposal wins the work and sets expectations before the engagement letter does the legal work. The ones that hold up later say plainly what is in scope, what is not, what the fee assumes and what happens if the facts turn out different.
This template carries the sections a prospective client reads: their situation in your words, a scope table with deliverables, the team, milestone dates that depend on client inputs, a fee table with assumptions and extra-work rates, and a clear statement that the engagement starts only on a signed engagement letter after your acceptance procedures.
When to use it
- A prospect asks for a quote on an audit, review, compilation, tax or advisory engagement.
- An existing client asks for a new service and you want the scope and price in writing before the engagement letter.
- Responding to a request for proposal where a short letter proposal is enough.
What’s inside
- Understanding of the client and the reason for the work
- Scope table with deliverables, and a written list of exclusions
- Team roles and a milestone table that shows what the client must supply
- Fee table with basis, assumptions, extra-work rates and billing terms
- Validity period, acceptance conditions and signature block
Standard cited
This template follows Firm practice (precedes the engagement letter). It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Is a signed proposal an engagement letter?
No. The proposal says what you offer and for how much. The engagement letter carries the responsibilities, standards and terms the engagement requires. For an audit, AU-C 210 requires agreement on the terms of the engagement, and the letter is the usual way to record it. The template says so in the text so the client does not treat the proposal as the final contract.
Can the fee depend on the result of a tax position?
Rarely. Circular 230 section 10.27(b) bars contingent fees for matters before the IRS except in a short list of cases: examinations or challenges to an original return, certain amended returns or refund claims filed within 120 days of a written examination notice, claims solely for interest or penalties, and judicial proceedings under the Internal Revenue Code. The AICPA Code has its own contingent fee rules, which also apply to attest clients. The template includes a short statement you can adapt or delete.
How long should a proposal stay valid?
Long enough for the client to decide, short enough that staffing and the facts have not changed. Thirty days is common. The template has a bracket for the number of days.
What should the fee assumptions cover?
The things that drive hours: condition of the records, number of entities and locations, whether the same system and staff as last year are in place, unusual transactions, and how much preparation the client does. Name them so the conversation about a revised fee has a reference point.
Related templates
- Audit Engagement Letter (AU-C 210)
- Client Acceptance and Continuance Form
- Engagement Scope Change Letter (Addendum)
- Audit Timeline and Budget Workbook (Excel)
Last updated 11/05/2026. All free templates.