ENGAGEMENT LETTER FOR COMPILATION OF

FINANCIAL FORECAST OR PROJECTION

Dear [Name]:

Option (1): Financial forecast

This letter is intended to outline our understanding of the nature and scope of the procedures to
be performed, as well as to confirm the objectives and terms of our engagement to compile the
financial forecast of [Entity].

From information management provides, we will compile, in accordance with standards

established by the American Institute of Certified Public Accountants, the forecasted balance
sheet and the related forecasted statements of income, retained earnings, cash flows, and
summaries of significant assumptions and accounting policies of [Entity] as of [date], for the
[period] then ending. We will not express any form of assurance on the achievability of the
forecast or on the reasonableness of the underlying assumptions.

A compilation of a financial forecast involves assembling the forecast based on management’s

assumptions and performing certain other procedures with respect to the forecast without
evaluating the support for, or expressing an opinion or any other form of assurance on, the
assumptions underlying it.

If for any reason we are unable to complete our compilation of your financial forecast, we will
not issue a report on it.

A financial forecast presents, to the best of management’s knowledge and belief, [Entity’s]
expected financial position, results of operations, and cash flows for the forecast period. It is
based on management’s assumptions regarding conditions it expects to exist and the course of
action it expects to take during the forecast period.

Management is responsible for representations about its plans and expectations and for
disclosure of significant information that might affect the ultimate realization of the forecasted
results.

Usually, there will be differences between the forecasted and actual results, because events and
circumstances frequently do not occur as expected. If those differences are material, our report
will contain a statement to that effect.

We have no responsibility to update our report to include events and circumstances occurring
after the date of our report.

At the conclusion of the engagement, management agrees to supply us with a representation

letter that, among other things, will confirm management’s responsibility for the underlying
assumptions and the appropriateness of the financial forecast and its presentation.
In order for us to complete this engagement, management must provide assumptions that are
appropriate for the forecast. If the assumptions provided are inappropriate and have not been
revised to our satisfaction, we will be unable to complete the engagement, and, accordingly, we
will not issue a report on the forecast.

If management intends to reproduce and publish the forecast and our report thereon, they must be
reproduced in their entirety, and all drafts of the document containing the forecast, as well as any
accompanying material, must be submitted to us for approval.

Option (2): Financial projection

From information management provides, we will compile, in accordance with standards

established by the American Institute of Certified Public Accountants, the projected balance
sheet and the related projected statements of income and retained earnings, cash flows, and
summaries of significant assumptions and accounting policies of [Entity] as of [date], for the
[period] then ending. We will not express any form of assurance on the achievability of the
projection or on the reasonableness of the underlying assumptions.

A compilation of a financial projection involves assembling the projection based on

management’s assumptions and performing certain other procedures with respect to the
projection without evaluating the support for, or expressing an opinion or any other form of
assurance on, the assumptions underlying it.

If for any reason we are unable to complete our compilation of your financial projection, we will
not issue a report on it as a result of this engagement.

A financial projection presents, to the best of management’s knowledge and belief, [Entity’s]
expected financial position, results of operations, and cash flows for the projection period,
assuming [describe hypothetical assumptions]. It is based on management’s assumptions
regarding conditions it expects would exist and courses of action it expects would be taken,
assuming [describe hypothetical assumptions].

Management is responsible for representations about its plans and expectations and for
disclosure of significant information that might affect the ultimate realization of the projected
results.

Even if [state hypothetical assumptions] were to occur, there will usually be differences between
the projected and actual results, because events and circumstances frequently do not occur as
expected. If the differences are material, our report will contain a statement to that effect.

We have no responsibility to update our report to include events and circumstances occurring
after the date of our report.

At the conclusion of the engagement, management agrees to supply us with a representation

letter that, among other things, will confirm management’s responsibility for the underlying
assumptions and the appropriateness of the financial projection and its presentation.
In order for us to complete this engagement, management must provide assumptions that are
appropriate for the projection. If the assumptions provided are inappropriate and have not been
revised to our satisfaction, we will be unable to complete the engagement, and, accordingly, we
will not issue a report on the projection.

We understand that the projection and our report thereon will be used only for [state intended
limited use]. If management intends to reproduce the projection and our report thereon, they
must be reproduced in their entirety, and all drafts of the document containing the projection, as
well as any accompanying material, must be submitted to us for approval.

Closing Language—To Be Used with Both Option (1) and Option (2)

Our fees for these services will be [at our regular rates/$[amount]] plus out-of-pocket expenses.
We will notify you immediately of any circumstances we encounter that materially affect our
total estimated fees. We will submit interim billings as work progresses and as we incur
expenses. Monthly invoices are payable upon receipt, and continuation of services is contingent
upon timely payments. We will assess a finance charge of [percent]% per month to all accounts
over 30 days old.

If these terms are acceptable to you and the services outlined are in accordance with your
understanding, please sign below and return this letter to my attention. A copy is enclosed for
your files.

We look forward to working with you and your staff, and we appreciate the opportunity to serve
you. Please call if you have any questions about any aspect of our engagement.

Sincerely,

[Firm]

Approved:

By

Date