I've been using a standard engagement letter for all my clients, but I keep seeing references to LOAs (Letters of Authorization) in forum discussions. What's the practical difference between the two documents? Is one better than the other for utility bill auditing work? I'm working mostly with smaller commercial clients served by Idaho Power and Rocky Mountain Power.
LOA vs engagement letter - what's the practical difference?
Warren, an LOA is typically a simpler document that just authorizes you to act on the client's behalf with their utility. It's mainly for getting access to billing data and communicating with the utility about account issues. An engagement letter is more comprehensive - it covers scope of work, fees, deliverables, liability, etc. For most audit work, you'll want both. The LOA gets you access to information, the engagement letter governs your professional relationship with the client.
I should add that some utilities have their own LOA forms they prefer customers to use. Georgia Power has a specific form they like to see, and it makes the data request process smoother if you use their format. But that LOA doesn't replace your engagement letter with the client - that's still the document that protects your interests and defines the business relationship.