1. Our services
1.1 We will perform this engagement on the basis that we must have access to all accounting records, and related information that we need to carry out our responsibilities. We will rely on all such information and documents being true, correct and complete and will not audit, verify, test or check it or them in any way.
2 Accounting services
2.1 You have asked us to assist you in the compilation of the financial statements. We will compile the financial statements, acting as your agents, based upon the accounting records provided by you and the information and explanations provided to us.
2.2 We shall plan our work on the basis that an audit report is not required by statute or regulation for the year, unless you inform us in writing to the contrary.
2.3 We must emphasise that you will retain responsibility for the accounting records and the financial statements, and any compilation work we undertake does not create any obligations on us to detect frauds or other irregularities unless specifically agreed in writing between us.
2.4 Our work as compilers of the annual financial statements will not constitute an audit of the accounts in accordance with Auditing Standards. Consequently, our work will not provide any assurance that the accounting records or the financial statements are free from material misstatement, whether caused by fraud, or other irregularities or error and cannot be relied on to identify weaknesses in internal controls.
2.5 Since we will not carry out an audit, nor confirm in any way the accuracy or reasonableness of the accounting records maintained by the company, we are unable to provide any assurance as to whether the financial statements that we compile from those records present a true and fair view.
2.6 We have a professional obligation to compile financial statements which, as far as practicable, conform with generally accepted accounting principles. Furthermore, the accounts of a limited company are required to comply with the Companies Act 2006 and applicable accounting standards,. Where we identify that the financial statements do not conform to accepted accounting principles, or if the accounting policies adopted are not immediately apparent, we will inform you of this, if it is not clear in the financial statements.
2.7 We have a professional responsibility not to allow our name to be associated with financial statements which may be misleading. Therefore, although we are not required to search for such matters, should we become aware, for any reason, that the financial statements may be misleading, we will discuss the matter with you with a view to agreeing appropriate adjustments and/or disclosures in the financial statements. In circumstances where adjustments and/or disclosures that we consider appropriate are not made or where we are not provided with appropriate information, and as a result we consider that the financial statements are misleading, we will withdraw from the engagement. Under such circumstances we will be entitled to receive all charges incurred up to the date of termination.
2.8 In carrying out our engagement we will make enquiries of management and undertake any procedures that we judge appropriate but are under no obligation to perform procedures that may be required for assurance engagements such as audits or reviews.
2.9 In order to avoid any misunderstanding and as part of our normal procedures, we may request you to provide written confirmation of any information or explanations given by you orally during the course of our work.
2.10 We shall require you to sign a declaration concerning the financial statements acknowledging your responsibility for them, stating that you approve and confirm that you have made available all the relevant records and information for their preparation.
Electronic Publication
2.11 If it is intended to publish or distribute financial information electronically, you are responsible for ensuring that any such publication properly presents the financial information and reports thereon and for the controls over, and security of, the website. You are also responsible for establishing and controlling the process for electronically distributing annual reports and other information.
2.12 You will seek our consent to any electronic publication including the use of our name before it occurs. We shall therefore require sight of such information before it is published. We reserve the right to withhold consent to the electronic publication of our reports (or the use of our name) if it is done in an inappropriate manner.
Deliverables
2.13 For the purpose of this Contract, our work products and deliverables in respect of statutory accounts services will be as follows:
- Statutory financial statements (full and abbreviated) for the period
- A mapping document to support the information disclosed in the financial statements
2.17 Any additional work products and deliverables in respect of Accounting services not detailed within these terms will be agreed between us in writing and will form an addendum to this contract.
3 The duties of the directors
3.1 The directors (“they”) of the company, are responsible for ensuring that the company maintains adequate accounting records and for preparing financial statements which give a true and fair view and which have been prepared in accordance with the Act or other applicable laws and regulations. They are responsible for ensuring that, to the best of their knowledge and belief, financial information, whether used to manage the company or used in the compilation of accounts, is reliable.
- In preparing the financial statements, they are required to:
- Select suitable accounting policies and then apply them consistently;
- Make judgements and estimates that are reasonable and prudent; and
- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
- For the avoidance of doubt, for the purposes of this engagement, they will provide us with the following information:
- Trial balance for the relevant accounting period
- Relevant bank statements
- Other information pertaining to transactions during the accounting period, as requested by us
3.4 They are responsible for ensuring that the activities of the companyare conducted honestly and that its assets are safeguarded, and for establishing arrangements designed to deter fraudulent or other dishonest conduct and to detect any that occurs.
3.5 They are responsible for ensuring that the company complies with laws and regulations applicable to its activities, and for establishing arrangements designed to prevent any non-compliance with laws and regulations and to detect any that occur.
3.6 As the company is registered in the United Kingdom, the financial statements are required to be delivered to the Registrar of Companies within nine months after the end of the company’s accounting reference period and it is the directors’ responsibility to ensure that this deadline is met. If the financial statements are delivered after this date the companywill be liable to a fine. This penalty is in addition to fines which may be payable by the directors.
3.7 They are also responsible for determining whether, in respect of the year, the company meets the conditions for exemption from an audit of the financial statements set out in section 477 of the Act, and for determining whether, in respect of the year, the exemption is not available for any of the reasons set out in section 478.
3.8 Should our work, as described in this agreement, indicate that the company is not entitled to exemption from an audit of the accounts, then we will inform you of this. In such circumstances, we will notify you in writing of the reasons. In these circumstances, if appropriate, we will discuss with you the need to appoint an auditor.
3.9 Should you instruct us to carry out an audit then a separate letter of engagement will be required. Our ability to undertake such an engagement will be subject to us satisfying auditor independence rules.