Terms of Engagement
Special Conditions – One Hour Free Consultation:
This is up to one hour’s free consultation and covers the collection of information confirming we are in a position to advise you. During this consultation, we do not provide answers or written opinions. We are not able to engage with you on the matter until an engagement letter has been signed and AML legislative requirements have been met (if required). Specialist Tax Advice is excluded from the free consultation.
Our Standard Terms of Engagement are covered by the following:
It is a requirement from Inland Revenue and the Chartered Accountants Australia and New Zealand (CA ANZ) that we have a signed letter of authority from our clients before acting for them. Signing this letter will ensure we have authority to act for all entities you have a financial interest in now and in the future. No work will be undertaken until this letter is signed.
The purpose of this document is to confirm our understanding and set out the terms of our engagement and the nature and extent of the services we will provide. Unless otherwise agreed between us in writing, this letter records the entire agreement between us in relation to our engagement. This document supersedes all prior engagement agreements. The terms recorded in this letter will remain in force until varied by us in writing to you, or until cancelled by either of us by notice in writing to the other.
Terms of Engagement
On the basis of the information you provide, we will compile financial statements and/or Income Tax Returns in accordance with the Service Engagement Standard No. 2 – Compilation of Financial Information (SES-2) issued by the Chartered Accountants Australia and New Zealand. For any financial statements or reports that we prepare, a Compilation Report and Disclaimer will be attached.
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.
The terms of engagement will apply to all current and associated entities both now and in the future.
Conditions and Responsibilities:
It is understood and agreed that:
Extent of Services
We do not accept any responsibility for the accuracy and completeness of the accounting records and 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 any 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 returns or reports for reasonableness and correctness, and you will need to understand the importance and risks of signing tax returns or other statutory compliance engagements as being true and correct statutory records.
Our engagement does not include the investigation or discovery of internal control weaknesses, 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.
Independence is not a requirement for a compilation engagement. If we are aware that we are not independent of any entity, 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 all your entities.
Use and Distribution of the Financial Information
We understand that the intended use and distribution of the financial information we will compile is to meet statutory requirements. 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.
Information and Disclosure
The conduct of this engagement is in accordance with the professional standards, rules and ethical requirements of the CA ANZ. 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 CA ANZ, we are subject to and bound by their disciplinary procedures and rules and our work and files are subject to their practice review rules under which compliance with professional standards by members is monitored. These procedures and rules require us to disclose to CA ANZ, their 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 CA ANZ, their reviewers and/or its disciplinary bodies. We assure you that the same ethical standards regarding confidentiality that we adhere to apply equally to CA ANZ reviewers.
You agree to indemnify and hold harmless Associated Business Advisors Limited, its Directors, employees, and agents from and against any and all costs, expenses, losses, claims, demands, actions, suits, or proceedings paid, incurred, or suffered by, or made or initiated against, any of them by any third party arising out of, or in connection with, this engagement.
Our fees are normally based on hours worked charged at rates appropriate to the work performed and the levels of expertise required.
At the commencement of work for each year we will, if you require, provide you with a quotation of the fee involved prior to commencing an assignment. If our costs seem likely to exceed this figure, or when our fee reaches a specified level, we will discuss the matter with you within a reasonable timeframe.
Payment of Accounts
We will invoice you on or near completion of the assignment. Our invoices will be due for payment within fourteen days of invoice (unless other arrangements have been made at the time of accepting the assignment). Any account queries must be brought to our attention within this time. If you are having difficulty paying your account please discuss this with us. It is our policy not to release final copies of financial statements or other reports or provide such reports to external parties until payment for the service has been received.
We have several options available for payment for work done or to be done and these need to be agreed before any work is undertaken. Unless otherwise agreed payment is due within 14 days of our invoice.
Xero subscription invoices will be sent out, by email, for the current month. Payment is due immediately, preferably by automatic payment directly to our bank account.
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 CA ANZ to resolve the matter. Details of this Service are available from CA ANZ. 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.
Authority to deduct fees owing from Tax Refunds
ABA is authorised to arrange for Inland Revenue to bank any tax or GST refunds into Associated Business Advisors Limited Trust Account. Alternatively, should a GST or tax refund be received by cheque this may also be banked into Associated Business Advisors Limited Trust Account.
ABA fees will be deducted from this refund and the balance forwarded to the client. The deduction of fees is authorised for the entity that the refund is received for plus all entities that the client has an association with.
Interest and Costs on Overdue Accounts
If you do not pay within our terms we reserve the right to charge interest on the overdue balance. Late payment may incur interest at the ASB current bank overdraft rate.
Limitation of Liability
You agree that in no circumstances shall the maximum liability of ABA (including its Directors, Employees and Agents) to you for any loss arising in connection with any engagement exceed three times the fees paid by you to ABA for that engagement.
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.
We claim a lien over all books and records in our possession until all work has been performed and all fees rendered have been paid.
Authority to Obtain Information from Third Parties including Financial Institutions and Inland Revenue
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 Inland Revenue, Companies Office, Accident Compensation Corporation (ACC), Banks, Solicitors and finance companies) if the information sought is relevant to our engagement.
The engagement letter gives authority to obtain information from Inland Revenue about all tax types (except Child Support) until further notice. This includes obtaining information through all Inland Revenue electronic, media and communication channels.
Retention of Records
We will store financial records that we hold on your behalf for a period of seven years after the applicable balance date. At the end of that period, unless you ask us to send that information to you, the records will be destroyed using a secure document destruction service.
Money we hold for you
We may sometimes hold money on your behalf. It will be held in Associated Business Advisors Limited Trust Account, which is completely separate from the firm’s funds. CA ANZ has strict rules about the way accountancy firms must handle their clients’ money and we follow these rules.
Non-accounting advice and financial advice
We do not provide legal or financial advice. Any opinion expressed should be confirmed by the appropriate professional. Any comment made on the subject of legal or investment matters should be interpreted as only a personal view and not professional advice.
Taxation Advice or Opinions
Should any taxation advice or opinion be requested or given either verbally or in writing then it will be given subject to the following disclaimer whether specifically stated or not:
This Tax Opinion has been prepared for the recipient to whom it is addressed. Associated Business Advisors Limited, or its directors, employees, contractors or consultants, do not accept any responsibility whatsoever to any other party for its contents. It is based on the law at the date of issue. Tax Laws are subject to frequent change. The opinion is based on the limited information provided and the actual outcome may be entirely different depending on the factors not disclosed or noted. Although the opinion is provided in good faith, it does not necessarily reflect the viewpoint of the Inland Revenue Department.
Clients should assert privilege for any tax advice (including letters and emails) and such advice should not be disclosed without taking further advice.
In some cases where ABA refers a client to one of its associates, ABA may receive a confidential commission or referral fee. ABA will ensure such referral commission does not compromise the position of the client. Associates will generally be another professional advisor.
We will ask you to initial each page and sign and the terms of engagement to confirm that you agree with the above terms of the engagement for our compilation of your financial statements and/or Income Tax Returns and other tasks as specified.