Miami Certified Public Accountant Providing Accounting, Tax, Audit and Consulting Services

Terms of Service Audited Financial Statements

Terms of Service – Audited Financial Statements 

 

The entity name above shall be referred to herein as “THE CLIENT”.

This letter is to confirm our understanding of the terms and objectives of our engagement and the nature and limitations of the services we will provide. Engagement letters as recommended “Best Practices” by the Florida Board of Accountancy, which you can refer to by visiting the Florida’s Website. Execution of this engagement letter confirms your understanding of the terms and objectives of the engagement, nature and limitations of the services we will provide.

We will audit the consolidated balance sheet of “THE CLIENT” as of “YEAR ENDED”, and the related consolidated statements of operations, retained earnings (deficit), and cash flows for the year then ended.

The objective of our audit is the expression of an opinion about whether your consolidated financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America.  Our audit will be conducted in accordance with auditing standards generally accepted in the United States and will include tests of your accounting records and other procedures we consider necessary to enable us to express such an opinion.  If our opinion is other than unqualified, we will discuss the reasons with you in advance.  If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement.

Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, tests of the physical existence of inventories, and direct confirmation of receivables and payables and certain other assets and liabilities by correspondence with selected customers, creditors, and financial institutions.  We will also request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry.  At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  Consequently, our audit will involve judgment about the number of transactions to be examined and the areas to be tested.  Also, we will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  Because an audit is designed to provide reasonable, but not absolute, assurance and because we will not perform a detailed examination of all transactions, there is a risk that material errors, fraud, or illegal acts, may exist and not be detected by us.  In addition, an audit is not designed to detect immaterial errors, fraud, or other illegal acts or illegal acts that do not have a direct effect on the financial statements.  Our engagement cannot, therefore, be relied upon to disclose errors, fraud, or other illegal acts that may exist.  However, we will inform you of any material errors that come to our attention and any fraud that comes to our attention.  We will also inform you of any other illegal acts that come to our attention, unless clearly inconsequential.  Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods of which we are not engaged as auditors.

Our audit will include obtaining an understanding of your internal controls sufficient to plan the audit and to determine the nature, timing, and extent of audit procedures to be performed.  An audit is not designed to provide assurance on internal controls or to identify reportable conditions, that is, significant deficiencies or material weaknesses in the design or operation of internal control.  Accordingly, we have no responsibility to identify and communicate significant deficiencies or material weaknesses in your internal controls as part of this engagement, and our engagement cannot be relied upon to disclose the same.  However, during the audit, if we become aware of such reportable conditions, we will communicate them to you.

Prior to preparation and execution of this engagement letter, we discussed with you the fact that we provide clients with services specifically focused on identifying and addressing weaknesses in internal controls (internal control review), and on searching for the existence of fraud within your company (fraud audit).  We further explained the additional costs associated with such different levels of service.  After consideration of such services, you have informed us that you wish to retain us to perform only the audit services described in this letter.

You are responsible for adopting sound accounting policies, for maintaining an adequate and efficient accounting system, for safeguarding assets, for authorizing transactions, for retaining supporting documentation for those transactions, and for devising a system of internal controls that will, among other things, help assure the preparation of proper financial statements.  You are also responsible for adjusting the financial statements to correct material misstatements and for confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.  Furthermore, you are responsible for management decisions and functions, for designating a competent employee to oversee any of the services we provide, and for evaluating the adequacy and results of those services.

You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the Company involving (a) management (b) employees who have significant roles in internal control, and (c) others where the fraud could have a material effect on the financial statements.  You are also responsible for informing us of your knowledge of any allegations of fraud or suspected fraud affecting the Company received in communications from employees, former employees, regulators, or others.  In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws and regulations.

You are responsible for making all financial records and related information available to us and for the accuracy and completeness of that information.  We will advise you about appropriate accounting principles and their application and will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you.  As part of our engagement, we may propose standard, adjusting, or correcting journal entries to your financial statements.  You are responsible for reviewing the entries and understanding the nature of any proposed entries and the impact they have on the financial statements.

In order for us to complete this engagement, and to do so efficiently, we require unrestricted access to the following documents and individuals within your company: “THE CLIENT”. We understand that your employees will prepare all cash, accounts receivable, and other confirmations we request and will locate any documents selected by us for testing.  Any failure to provide such cooperation, and to do so on a timely basis, will impede our services, and may require us to suspend our services or withdraw from the engagement.

Gustavo A Viera, CPA is the engagement partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it.  Mr. Viera is the engagement partner and is responsible for supervising the engagement. Additionally, Mr. Viera is the only authorized employee of Gustavo A Viera PA to:

  • Sign the Accountants Report
  • Sign any original Local, State or Federal Tax Return
  • Sign any other document(s) not specifically listed herein
  • Authorize the release of original or copies of a clients source documents
  • Authorize the release of original Financial Statements or copies of previously issued Financial Statements
  • Authorize the release of any original Local, State or Federal Tax Return or copies of previously issued Local, State or Federal Tax Return
  • Authorize the release of any original or copies of any other document(s) not specifically listed herein

No documents will be released directly to your attorney, bankers, insurance agents, employee of “THE CLIENT” or other party including Local, State & Federal governmental agencies. All requests shall be addressed to Mr. Viera in writing (email, fax or mail) and the requested documents will be sent to “THE CLIENT” directly. No documents shall me submitted to any third party directly. These request are handled as expediently as possible. However, circumstances such as vacations or holidays may delay the turn around time, so please plan accordingly. If Mr. Viera is out of the office, employees are forbidden to release documents for “THE CLIENTS” protection and security. Gustavo A Viera PA reserves the right to charge an additional fee in accordance to the attached rate sheet.

Our fees for this engagement are not contingent on the results of our services.  Rather, our fees for this engagement are state below.            In the event that we encounter unusual circumstances that would require us to expand the scope of the engagement we will adjust our estimate, and obtain your prior approval before continuing with the engagement.

AUDIT FEE $ __________. Prior to commencing our services, we require that you provide us with a non-refundable retainer in the 50% of the fee stated above.  The retainer will be applied against our final invoice and the balance due is payable upon your receipt of the audit report. We reserve the right to suspend our services or to withdraw from this engagement in the event that any of our invoices are deemed delinquent.  In the event that any collection action is required to collect unpaid balances due us, you agree to reimburse us for our costs of collection, including attorneys’ fees.

If we elect to terminate our services for nonpayment, or for any other reason provided for in this letter, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed our report and.  You will be obligated to compensate us for all time expended, and to reimburse us for all of our out-of-pocket costs, through the date of termination.

In connection with this engagement, we may communicate with you or others via email transmission.  As emails can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third party, or may not be delivered to each of the parties to whom they are directed and only to such parties, we cannot guarantee or warrant that emails from us will be properly delivered and read only by the addressee.  Therefore, we specifically disclaim and waive any liability or responsibility whatsoever for interception or unintentional disclosure of emails transmitted by us in connection with the performance of this engagement.  In that regard, you agree that we shall have no liability for any loss or damage to any person or entity resulting from the use of email transmissions, including any consequential, incidental, direct, indirect, or special damages, such as loss of revenues or anticipated profits, or disclosure or communication of confidential or proprietary information.

You are responsible to notify us in advance of your intent to reproduce our report for any reason, in whole or in part, and to give us the opportunity to review any printed material containing our report before its issuance.  Such notification does not constitute an acknowledgement on our part of any third party’s intent to rely on the financial statements.  With regard to financial statements published electronically on your Internet website, you understand that electronic sites are a means to reproduce and distribute information.  We are not required to read the information contained in your sites, or to consider the consistency of other information in the electronic site with the original document.

It is our policy to retain engagement documentation for a period of seven years, after which time we will commence the process of destroying the contents of our engagement files.  To the extent we accumulate any of your original records during the engagement, those documents will be returned to you promptly upon completion of the engagement, and you will provide us with a receipt for the return of such records.  The balance of our engagement file, other than the compiled financial statement, which we will provide to you at the conclusion of the engagement, is our property, and we will provide copies of such documents at our discretion and if compensated for any time and costs associated with the effort.

In the event we are required to respond to a subpoena, court order or other legal process for the production of documents and/or testimony relative to information we obtained and/or prepared during the course of this engagement, you agree to compensate us at our hourly rates, as set forth above, for the time we expend in connection with such response, and to reimburse us for all of our out-of-pocket costs incurred in that regard.

In the event that we are or may be obligated to pay any cost, settlement, judgment, fine, penalty, or similar award or sanction as a result of a claim, investigation, or other proceeding instituted by any third party, then to the extent that such obligation is or may be a direct or indirect result of your intentional or knowing misrepresentation or provision to us of inaccurate or incomplete information in connection with this engagement, and not any failure on our part to comply with professional standards, you agree to indemnify us, defend us, and hold us harmless as against such obligations.

You agree that any dispute (other than our efforts to collect an outstanding invoice) that may arise regarding the meaning, performance or enforcement of this engagement or any prior engagement that we have performed for you, will, prior to resorting to litigation, be submitted to mediation, and that the parties will engage in the mediation process in good faith once a written request to mediate has been given by any party to the engagement.  Any mediation initiated as a result of this engagement shall be administered within the county of Miami-Dade and Florida, by Mediation Services Inc. according to its mediation rules, and any ensuing litigation shall be conducted within said county, according to Florida law.  The results of any such mediation shall be binding only upon agreement of each party to be bound.  The costs of any mediation proceeding shall be shared equally by the participating parties.

Any litigation arising out of this engagement, except actions by us to enforce payment of our professional invoices, must be filed within one year from the completion of the engagement, notwithstanding any statutory provision to the contrary.

This engagement letter is contractual in nature, and includes all of the relevant terms that will govern the engagement for which it has been prepared.  The terms of this letter supersede any prior oral or written representations or commitments by or between the parties.  Any material changes or additions to the terms set forth in this letter will only become effective if evidenced by a written amendment to this letter, signed by all of the parties.

If, after full consideration and consultation with counsel if so desired, you agree that the foregoing terms shall govern this engagement, please sign this letter in the space provided and return the original signed letter to me, keeping a fully-executed copy for your records.

 

Thank you for your attention to this matter, and please contact me with any questions that you may have.

Gustavo A Viera CPA

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