Roseingrave & Vallance Ltd trading as ROVA Chartered Accountants  l  Terms of Engagement


1           Our Service

On the basis of information you provide, and commencing with the financial year as stated in the attached letter, we will compile, where necessary, a set of financial statements comprising of a balance sheet and profit & loss statement along with associated tax returns for the entity/entities named in the attached cover letter.  This engagement will be performed in accordance with Service Engagement Standard No.2 Compilation of Financial Information (SES-2) issued by the New Zealand Institute of Chartered Accountants.

The financial information will be prepared in accordance with the Special Purpose Framework for use by For-Profit Entities (SPFR for FPEs) in New Zealand and this will be disclosed as part of the financial information.  The financial statements are required to result in a true and fair presentation of the financial information, and if compliance with SPFR for FPEs does not result in a true and fair presentation, additional disclosures will be required to achieve that result.  Any known departures from the Special Purpose Framework for use by For-Profit Entities (SPFR for FPEs) in New Zealand will be disclosed within the financial statements.

Our procedures will not include verification or validation procedures.  No audit or review engagement will be performed and accordingly no assurance will be expressed.

Our compilation report included with our financial statements will be issued on completion of the engagement and is currently expected to read as follows:

Example Compilation Report

Scope

On the basis of information you provided we have compiled, in accordance with Service Engagement Standard No. 2:  Compilation of Financial Information, the financial statements of {Example Entity} for the period ended 31 March 2018 as set out on pages … to … These have been prepared in accordance with the Special Purpose Framework for use by For-Profit Entities (SPFR for FPEs) in New Zealand described in Note 1 to the financial statements.

Responsibilities

You are solely responsible for the information contained in the financial statements and have determined that the Special Purpose Framework for use by For-Profit Entities (SPFR for FPEs) in New Zealand is appropriate to meet your needs and for the purpose that the financial statements were prepared.

The financial statements were prepared exclusively for your benefit.  We do not accept responsibility to any other person for the contents of the financial statements.

No audit of review engagement undertaken

Our procedures use accounting expertise to undertake the compilation of the financial statements from information you provided.  Our procedures do not include verification or validation procedures.  No audit or review engagement has been performed and accordingly no assurance is expressed.

Disclaimer of Liability

We have compiled the financial information based on the information provided to us which has not been subject to an audit or review engagement. Accordingly, neither we nor any of our employees accept any responsibility for the reliability, accuracy or completeness of the compiled financial information nor do we accept any liability of any kind whatsoever, including liability by reason of negligence, to any person for losses incurred as a result of placing reliance on the compiled financial information.

Independence (if required)

We are not independent of {Example Entity} because the member participates in the decision of management regarding the compiled financial information.

2           Extent of Services

We do not accept any responsibility for the accuracy and completeness of the accounting records and any other information you supply to us or for the reliability, accuracy and completeness of the financial information compiled on the basis of those records and information.  We also do not accept responsibility for the maintenance of adequate accounting records, an adequate internal control structure and the selection and application of appropriate accounting policies within your organisation.  In addition, you are solely responsible to users of the financial information we compile.

You will be required to review and approve the final reports for reasonableness and correctness, and you will need to understand the importance and risks of signing income tax returns as being true and correct statutory records.

The information you are to supply and any other information that we consider necessary to complete the engagement must be provided on a timely basis in order that the engagement can be completed on a timely basis.

Our engagement does not include the investigation or discovery of internal control weakness, errors, illegal acts or other irregularities, including without limitation, fraud, or non-compliance with laws and regulations.  However, we will inform you of any such matters which come to our attention during the course of our engagement.

If, for any reason, we are unable to complete the compilation of your financial information, or we consider the information to be misleading, we may refer to such matters within our compilation report or we may determine, at our sole discretion, not to issue a report.

3           Independence

Independence is not a requirement for a compilation engagement.  If we are aware that we are not independent of the entity/entities as named in the cover letter, this fact will be stated in our report. 

However, we will not conduct a comprehensive review to determine whether we are, or are not, independent of the entity/entities as named in the cover letter.

4           Use and distribution of the financial information

We understand that the intended use and distribution of the financial information we will compile is for your benefit only.  If this should change in any material respect, you will inform us immediately.  We will not accept any responsibility to any person, other than you, for the contents of the financial statements.

No person should rely on the financial statements without having an audit or review engagement conducted.

5           Information and Disclosure

The conduct of this engagement is in accordance with the professional standards, rules and ethical requirements of the New Zealand Institute of Chartered Accountants.  Information we obtain in the course of this engagement is subject to confidentiality requirements, in addition to our obligations under the Privacy Act 1993.  We will not disclose that information to other parties, without your express consent, except as required by law or professional obligations.

However, as members of the New Zealand Institute of Chartered Accountants, we are subject to and bound by the disciplinary procedures and rules of the Institute, and our work and files are subject to the practice review rules of the Institute under which compliance with professional standards by members is monitored.  These procedures and rules require us to disclose to the Institute, its reviewers and/or its disciplinary bodies our files and work papers including client information.  By allowing us to undertake this engagement (whether or not you sign this letter), you acknowledge that, if requested, our files relating to this engagement will be made available to the Institute, its reviewers and/or its disciplinary bodies.  We assure you that the same ethical standards regarding confidentiality that we adhere to apply equally to the Institute’s reviewers.

6           Fees

Our fees are normally based on hours worked, charged at rates appropriate to the work performed and the levels of expertise required.  Instalment options are available for the payment of fees and are detailed in clause 7.

In the unfortunate circumstance that a disagreement arises between us over our fees, if the matter cannot be resolved amicably by discussion (which is the preferred option) then we both agree to use the Fees Resolution Service of the New Zealand Institute of Chartered Accountants to resolve the matter.  Details of this service are available from the Institute.  You should be aware that, like all other providers of services, we are entitled to retain possession of your records that have been used in relation to this engagement until outstanding fees are settled.

7           Instalment Options for Fees

Where an instalment option has been chosen the following clause specific to the option shall apply:

7.1      Instalment Option with wash-up

Payments are made up of twelve agreed monthly instalments and one wash up payment/refund after the final bill is issued.  The instalment year starts 9 months before balance date.  Where this option is started within the instalment year, the agreed estimated annual fee will be divided by the number of remaining months.

7.2      Fixed Instalment Option

Note this option is not available to all clients.

This is a fixed fee paid by twelve agreed monthly instalments.  The instalment year starts 9 months before balance date.  Where this option is started within the instalment year, the agreed fixed annual fee will be divided by the number of remaining months.

The fixed instalment fee is based on the estimated number of hours charged at the rates appropriate to the work to be performed and the level of expertise required for the engagement.  It is possible that the nature of the engagement may change, either in its principal function or the intended distribution and use of the results of the engagement.  If this does occur, we retain the right to revise the fee accordingly.

8           Default and Consequences of Default

Interest on overdue invoices shall accrue daily from the date when payment becomes due, until the date of payment, at a rate of two and one-half percent (2.5%) per calendar month (and at Roseingrave & Vallance Limited’s sole discretion such interest shall compound monthly at such a rate) after as well as before any judgment.

In the event that your payment is dishonoured for any reason you shall be liable for any dishonour fees incurred by Roseingrave & Vallance Limited.

If you default in payment of any invoice when due, you shall indemnify Roseingrave & Vallance Limited from and against all costs and disbursements incurred by Roseingrave & Vallance Limited in pursuing the debt including legal costs and collection agency costs.

If any account remains overdue after thirty (30) days, then an amount of the greater of $20.00 or 10% of the amount overdue (up to a maximum of $200.00) shall be levied for administration fees which sum shall become immediately due and payable.

9           Ownership of work papers

Material that you provide to us remains yours and will be returned to you when the engagement is completed.  Work papers that we create remain our property.

However, if your affairs at some time in the future are handled by another Chartered Accountant, we will make available, as required by the Code of Ethics, such information regarding your affairs that is essential to enable your new Chartered Accountant to perform the services we previously provided.

Our work may involve the collection of personal information relevant or incidental to the engagement.  Any such information will be held at our offices and will be retained for as long as may be relevant to the engagement, and, except where otherwise noted in this letter, will only be used or disclosed for purposes related to the engagement.  Individuals concerned will be able to contact us to access information held concerning them and, if necessary, seek correction to that information.  By signing this engagement letter, you confirm we have authority to communicate with and obtain information from any third party (including the Inland Revenue Department) if the information sought is relevant to our engagement.

We will store tax records that we hold on your behalf for a period of seven years after the applicable balance date.  At the end of the period, unless you ask us to send that information to you, the records will be destroyed using a secure document destruction service.