SCHEDULE OF SERVICES – Micro-entity financial statements
This schedule should be read in conjunction with the engagement letter and the standard terms and conditions.
Our fees are based on the following understanding relating to the business. If this proves to not be the case we will inform you before we start work if our fees need to be amended.
Your responsibilities
The advice that we give can only be as good as the information on which it is based. In so far as that information is provided by you, or by third parties with your permission, your responsibility arises as soon as possible if any circumstances or facts alter, as any alteration may have a significant impact on the advice given. If the circumstances change therefore or your needs alter, advise us of the alteration as soon as possible in writing.
Statutory responsibilities
As directors of the company, you are required by statute to prepare accounts (financial statements) for each financial year, which give a true and fair view of the state of affairs of the company and of its profit or loss for that period. In preparing those accounts you must:
1. Select suitable accounting policies and then apply them consistently.
2. Make judgements and estimates that are reasonable and prudent.
3. Prepare the accounts on the going concern basis unless it is not appropriate to presume that the company will continue in business.
You have engaged us to prepare the micro accounts on your behalf.
It is your responsibility to keep proper accounting records that disclose with reasonable accuracy at any particular time the financial position of the company. It is also your responsibility to safeguard the assets of the company and for taking reasonable steps for the prevention of and detection of fraud and other irregularities with an appropriate system of internal controls.
You are responsible for determining whether, in respect of the year concerned, the company meets the conditions for exemption from an audit set out in section 477 of the Companies Act 2006, and for determining whether, in respect of the year, the exemption is not available for any of the reasons set out in section 478 of the Companies Act 2006.
You are also responsible for confirming that the company meets the qualifying conditions as a micro entity set out in the Small Companies (Micro-Entities’ Accounts) Regulations 2013
You are also responsible for making available to us, as and when required, all the company’s accounting records and all other relevant records and related information, including minutes of management and shareholders’ meetings.
You will also be responsible for:
1. Maintaining records of all receipts and payments of cash.
2. Maintaining records of invoices issued and received.
3. Reconciling balances monthly/annually with the bank statements.
4. Preparing details of the following at the year end: stocks and work in progress; fixed assets; amounts owing to suppliers; amounts owing by customers; and accruals and prepayments.
Our work will not be an audit of the accounts in accordance with International Standards on Auditing (UK and Ireland). Accordingly we shall not seek any independent evidence to support the entries in the accounting records, or to prove the existence, ownership or valuation of assets or completeness of income, liabilities or disclosure in the accounts. Nor shall we assess the reasonableness of any estimates or judgements made in the preparation of the accounts. Consequently our work will not provide any assurance that the accounting records are free from material misstatement, irregularities or error.
As part of our normal procedures we may request you to provide written confirmation of any oral information and explanations given to us during the course of our work.
We have a professional duty to compile accounts that conform with generally accepted accounting principles. The accounts of a micro entity limited company are required to comply with the disclosure requirements of the Small Companies (Micro-Entities’ Accounts) Regulations 2013. Where we identify that the accounts do not conform to accepted accounting principles or standards, we will inform you and suggest amendments be put through the accounts before being published. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases, where this matter cannot be resolved, we will withdraw from the engagement and notify you in writing of the reasons.
Should you instruct us to carry out any alternative report it will be necessary for us to issue a separate letter of engagement.
Our service to you
We will not be carrying out any audit work as part of this assignment and accordingly will not verify the assets and liabilities of the company, nor the items of expenditure and income. To carry out an audit would entail additional work to comply with International Standards on Auditing so that we could report on the truth and fairness of the financial statements. We would also like to emphasise that we cannot undertake to discover any shortcomings in your systems or irregularities on the part of your employees.
If an audit of the accounts is required, you will need to notify us in writing. Should our work indicate that the company is not entitled to exemption from an audit of the accounts, we will inform you.
To ensure that anyone reading the accounts is aware that we have not carried out an audit, we will attach to the accounts a report stating this fact.
We will attach to the accounts a report developed by the Consultative Committee of Accountancy Bodies (CCAB) which explains what work has been done by us, the professional requirements we have to fulfil and the standard to which the work has been carried out. Web links are provided in the report so that you can obtain further information from the Association of Chartered Certified Accountants about:
Once we have issued our report we have no further direct responsibility in relation to the accounts for that financial year. However, we expect that you will inform us of any material event occurring between the date of our report and that of the annual general meeting that may affect the accounts.
Ad-hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate, we will always discuss and agree additional fees in advance.
Ad-hoc and advisory work
Where the nominated director has instructed us to do so we will provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter.
Where specialist advice is required on occasion, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by the nominated director.
Changes in the law or public policy and practice
We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or public policy and practice or your circumstances.
We will accept no liability for losses arising from changes in the law (or the interpretation thereof) or public policy and practice that are first published after the date on which the advice is given.
Our services as detailed above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions of business. These are important provisions, which you should read and consider carefully.
19 May 2020
SONNET
This schedule should be read in conjunction with the engagement letter and the standard terms and conditions.
Our fees are based on the following understanding relating to the business. If this proves to not be the case we will inform you before we start work if our fees need to be amended.
- Your turnover is no more than £85,000
- Your will provide fully reconciled electronic records with a full trial balance
- You will provide us with all requested documentation prior to our commencing work
Your responsibilities
The advice that we give can only be as good as the information on which it is based. In so far as that information is provided by you, or by third parties with your permission, your responsibility arises as soon as possible if any circumstances or facts alter, as any alteration may have a significant impact on the advice given. If the circumstances change therefore or your needs alter, advise us of the alteration as soon as possible in writing.
Statutory responsibilities
As directors of the company, you are required by statute to prepare accounts (financial statements) for each financial year, which give a true and fair view of the state of affairs of the company and of its profit or loss for that period. In preparing those accounts you must:
1. Select suitable accounting policies and then apply them consistently.
2. Make judgements and estimates that are reasonable and prudent.
3. Prepare the accounts on the going concern basis unless it is not appropriate to presume that the company will continue in business.
You have engaged us to prepare the micro accounts on your behalf.
It is your responsibility to keep proper accounting records that disclose with reasonable accuracy at any particular time the financial position of the company. It is also your responsibility to safeguard the assets of the company and for taking reasonable steps for the prevention of and detection of fraud and other irregularities with an appropriate system of internal controls.
You are responsible for determining whether, in respect of the year concerned, the company meets the conditions for exemption from an audit set out in section 477 of the Companies Act 2006, and for determining whether, in respect of the year, the exemption is not available for any of the reasons set out in section 478 of the Companies Act 2006.
You are also responsible for confirming that the company meets the qualifying conditions as a micro entity set out in the Small Companies (Micro-Entities’ Accounts) Regulations 2013
You are also responsible for making available to us, as and when required, all the company’s accounting records and all other relevant records and related information, including minutes of management and shareholders’ meetings.
You will also be responsible for:
1. Maintaining records of all receipts and payments of cash.
2. Maintaining records of invoices issued and received.
3. Reconciling balances monthly/annually with the bank statements.
4. Preparing details of the following at the year end: stocks and work in progress; fixed assets; amounts owing to suppliers; amounts owing by customers; and accruals and prepayments.
Our work will not be an audit of the accounts in accordance with International Standards on Auditing (UK and Ireland). Accordingly we shall not seek any independent evidence to support the entries in the accounting records, or to prove the existence, ownership or valuation of assets or completeness of income, liabilities or disclosure in the accounts. Nor shall we assess the reasonableness of any estimates or judgements made in the preparation of the accounts. Consequently our work will not provide any assurance that the accounting records are free from material misstatement, irregularities or error.
As part of our normal procedures we may request you to provide written confirmation of any oral information and explanations given to us during the course of our work.
We have a professional duty to compile accounts that conform with generally accepted accounting principles. The accounts of a micro entity limited company are required to comply with the disclosure requirements of the Small Companies (Micro-Entities’ Accounts) Regulations 2013. Where we identify that the accounts do not conform to accepted accounting principles or standards, we will inform you and suggest amendments be put through the accounts before being published. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases, where this matter cannot be resolved, we will withdraw from the engagement and notify you in writing of the reasons.
Should you instruct us to carry out any alternative report it will be necessary for us to issue a separate letter of engagement.
Our service to you
We will not be carrying out any audit work as part of this assignment and accordingly will not verify the assets and liabilities of the company, nor the items of expenditure and income. To carry out an audit would entail additional work to comply with International Standards on Auditing so that we could report on the truth and fairness of the financial statements. We would also like to emphasise that we cannot undertake to discover any shortcomings in your systems or irregularities on the part of your employees.
If an audit of the accounts is required, you will need to notify us in writing. Should our work indicate that the company is not entitled to exemption from an audit of the accounts, we will inform you.
To ensure that anyone reading the accounts is aware that we have not carried out an audit, we will attach to the accounts a report stating this fact.
We will attach to the accounts a report developed by the Consultative Committee of Accountancy Bodies (CCAB) which explains what work has been done by us, the professional requirements we have to fulfil and the standard to which the work has been carried out. Web links are provided in the report so that you can obtain further information from the Association of Chartered Certified Accountants about:
- The technical guidance for the work, and
- The related ethical and other professional requirements.
Once we have issued our report we have no further direct responsibility in relation to the accounts for that financial year. However, we expect that you will inform us of any material event occurring between the date of our report and that of the annual general meeting that may affect the accounts.
Ad-hoc queries by way of telephone and email enquiries are not routine compliance and may result in additional fees. As indicated below, where appropriate, we will always discuss and agree additional fees in advance.
Ad-hoc and advisory work
Where the nominated director has instructed us to do so we will provide such other taxation ad hoc and advisory services as may be agreed between us from time to time. These services will be subject to the terms of this engagement letter and standard terms and conditions of business unless we decide to issue a separate engagement letter.
Where specialist advice is required on occasion, we may need to seek this from or refer you to appropriate specialists. We will only do this when instructed by the nominated director.
Changes in the law or public policy and practice
We will not accept responsibility if you act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid in the light of any change in the law or public policy and practice or your circumstances.
We will accept no liability for losses arising from changes in the law (or the interpretation thereof) or public policy and practice that are first published after the date on which the advice is given.
Our services as detailed above are subject to the limitations on our liability set out in the engagement letter and in our standard terms and conditions of business. These are important provisions, which you should read and consider carefully.
19 May 2020
SONNET
