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  1. #1

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    Default Appointment of Accountant Letter

    I recently appointed an accountant for my Ltd company. He has sent me a letter explaining the contract between my Ltd company and the accountancy. Can anyone tell me if there is anything in here that I should be concerned about? The letter is as follows:


    The purpose of this letter is to set out the basis on which we are engaged as accountants to the company and supersedes any previous engagement letters.

    Responsibilities of Directors and Reporting Accountant

    As directors of the company, you are responsible for maintaining proper accounting records and for preparing accounts which give a true and fair view and which have been prepared in according with the Companies Act 1985 (the Act).

    1.2 You are also responsible for determining whether, in respect of the year, the company meets the conditions for exemption from the need to appoint an auditor or a reporting accountant as set out in section 249A of the Act, and for determining whether, in respect of the year, the audit exemption is not available for any reasons set out in section 249B.

    1.3 We shall plan our work on the basis that no audit or reporting accountant's report under Section 249c of the Act is required for the year, unless you inform us in writing that either:
    a) the company requires an audit of the accounts; or b) the company requires a reporting accountants' report in according with section 249c of the Act.

    1.4 Should you instruct us to carry out an audit or act as reporting accountants, then a separate letter of engagement will be required.

    2. Accounting and Other Services

    You have asked us to assist you in the maintenance of the accounting records and in the preparation of the annual accounts as follows:

    2.1 We shall write up the books and records of the company from the documentation and information provided to us. You have agreed that all such documentation provided will be complete and in date or sequence order. You have also agreed that you will make full disclosure to us of all the relevant information needed to enable us to write up the books and records and to produce the accounts.

    2.2 Within two months of the company's year end we shall have written to you requesting the documents and information required in order to write up the company's books and records and prepare the company's accounts. This will include details of the company's year-end, stock and of transactions and events after the company's year-end up to the date of preparing the accounts.

    2.3 We shall prepare the accounts, without carrying out an audit, from the accounting records and from explanations supplied to us. We shall prepare the accounts in accordance with generally accepted accounting principles, appropriate accounting standards and the format and disclosure requirements of the Companies Act 1985.

    Registered to carry on audit work and regulated for a range of investment business activities by <mod>snip</mod>

    2.4 Without undertaking an audit, we are not able to confirm that the accounts give a true and fair view. Our procedures will not enable us to make judgements on or form any opinion regarding the truth and fairness of those accounts. Consequently, our work will not provide any assurance that the accounting records are free from material misstatement, whether caused by fraud, other irregularities or error.

    2.5 To the above accounts we shall attach our "Accountant's Report" which will confirm that we have prepared the accounts, without carrying out an audit, from the books, records and information supplied by yourself.

    3 Fees
    Our fees are computed on the basis of time spent on the Company's affairs by the Partners and our staff, and on the level of skills and responsibility involved. Our fees for the preparation of the accounts, payroll services and the completion of the Corporation Tax Return will be 700 plus VAT for the year ended 30th September 2012.

    Any tax fees included in the above will be for routine tax work i.e. submission of tax return and computations. Any protracted correspondence with the Inspector, if any, will be discussed with you prior to the work being carried out and billed separately. VAT Return will be completed by yourself but if we have to complete these, our charges will 125 plus vat per return.

    4. External Review
    Arising from the regulatory requirements of the Institute of Chartered Accountants, our work is subject to external review by independent qualified accountants. Accordingly, an external reviewer, who will be subject to a confidentiality agreement, can review our client files.

    5. Ethical and Practice Guidelines
    In accepting the terms of this letter you recognise that we shall comply with our Institute's ethical and practice guidelines including the correction of any Inland Revenue errors.

    6. Standard of Service
    At any time you would like to discuss with us how our service could be improved or if you are dissatisfied with the service you are receiving, please let us know. We undertake to look into any complaint carefully and promptly and to do all we can to explain the position to you. If we have given you a less than satisfactory service we undertake to do everything reasonable to put it right. If you are still not satisfied you may of course refer the matter to the Institute of Chartered Accountants in England and Wales, which as the power to take disciplinary action against members in appropriate cases.

    7. Provision Of Services Regulations 2009
    We comply with the above regulation by displaying the required details of our Professional Indemnity Insurance in our offices.
    We should be grateful if you would indicate your agreement to the contents of this letter by signing the enclosed copy and returning it to us. If any part is not acceptable to you or is unclear, we shall be pleased to receive your further observations and to give you any further information you may require or to discuss matters with you.

    8. Agreement of Terms
    We should be grateful if you would indicate your agreement to the contents of this letter by signing the enclosed copy and returning it to us. If any part is not acceptable to you or is unclear, we shall be pleased to receive your further observations and to give you any further information you may require or to discuss matters with you.

    We look forward to a long association with you and your business.

  2. #2

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    Clare@InTouch's Avatar
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    Apart from the fact that it refers to the Companies Act 1985 (inc. section numbers) which has been superseded by the Companies Act 2006, it seems quite standard.

  3. #3

    Fingers like lightning

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    Hi Knight007,

    Another point to look out for further to Clare's response is:

    The Inland Revenue is now known as HMRC since they merger with HM Customs and Excise in April 2005.
    Last edited by Craig@InTouch; 18th November 2011 at 10:47. Reason: Clare and I are battling to give the same answers :)

  4. #4

    Still gathering requirements...


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    is it worth me asking the accountancy to amend the terms? Could it be a problem for me in the future if I agree to the terms as they are?

  5. #5

    Godlike

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    Quote Originally Posted by Craig@InTouch View Post
    Hi Knight007,

    Another point to look out for further to Clare's response is:

    The Inland Revenue is now known as HMRC since they merger with HM Customs and Excise in April 2005.
    Doesn't fill you with confidence, does it... Hope they have an adequate supply of quills.
    Blog? What blog...?

  6. #6

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    Quote Originally Posted by knight007 View Post
    is it worth me asking the accountancy to amend the terms? Could it be a problem for me in the future if I agree to the terms as they are?
    It won't be a problem, it just reflects the fact that they've not updated their terms & conditions for a few years!

  7. #7

    Fingers like lightning

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    Quote Originally Posted by malvolio View Post
    Doesn't fill you with confidence, does it... Hope they have an adequate supply of quills.
    And blotting paper...

  8. #8

    More fingers than teeth

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    Quote Originally Posted by Craig@InTouch View Post
    Hi Knight007,

    Another point to look out for further to Clare's response is:

    The Inland Revenue is now known as HMRC since they merger with HM Customs and Excise in April 2005.
    Come on Clare, don't let this upstart have the last word! 'Ave im!!

    'CUK forum personality of 2011' - Winner

    Yes really!!!!

  9. #9

    Faqqed Off

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    Busy day in the InTouch offices??
    <Your signature goes here>

  10. #10

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    Quote Originally Posted by northernladuk View Post
    Come on Clare, don't let this upstart have the last word! 'Ave im!!



    Upstart? Don't call him that, he already thinks he younger than he is and that'll just make him worse

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