COMPILATION OF THE ACCOUNTS (CHARITY EXEMPT)
The purpose of this schedule to our engagement letter is to set out the basis on which we are to compile the accounts for the charitable company/charity.
1. RESPONSIBILITIES OF THE TRUSTEES
1.1You are responsible for ensuring that the charitable company/charity maintains adequate accounting records and for preparing accounts which give a true and fair view and which have been prepared in accordance with the relevant legislation.
1.2 Where applicable, your responsibility for preparation of the financial statements extends to the application of exemptions and options on transition to, and application of, new accounting standards. As trustees of the charitable company/charity you should also consider the impact of new accounting standards on the charitable company/charity, including the impact on going concern.
1.3 In preparing the accounts, you are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent; and
•prepare the accounts on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
1.4You are also responsible for safeguarding the assets of the charitable company/charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
1.5You are responsible for ensuring that the charitable company/charity complies with the laws and regulations applicable to its activities, and for establishing arrangements designed to prevent any non compliance with laws and regulations and to detect any that occur.
1.6You have undertaken to make available to us, as and when required, all the charitable company’s/charity’s accounting records and related financial information, including minutes of management and trustees meetings necessary for the compilation of the accounts. You will make full disclosure to us of all relevant information.
2. RESPONSIBILITIES OF THE ACCOUNTANTS
2.1As the charitable company/charity is exempt from the requirement for any external scrutiny, we have no statutory responsibilities to the charity at all. Our only responsibilities arise from those specifically agreed upon between us in respect of other professional services.
2.2You have asked us to assist you in the preparation of the accounts. We will compile the annual accounts for your approval based on the accounting records maintained by you and the information and explanations you give us. We shall plan our work on the basis that no report is required by statute or regulation for the year, unless you inform us in writing to the contrary. In carrying out our engagement we will make enquiries of management and undertake any procedures that we judge appropriate but are under no obligation to perform procedures that may be required for assurance engagements such as audits, independent examinations or reviews.
2.3 You have advised us that the charity is exempt from an audit of the accounts and does not require an independent examination. We will not carry out any work to determine whether or not the charity is entitled to these exemptions. However, should our work indicate that the charity is not entitled to any exemption, we will inform you of this.
2.4Our work will not be an audit of the accounts in accordance with International Standards on Auditing (UK). Consequently, our work will not provide any assurance that the accounting records or the accounts are free from material misstatement, whether caused by fraud, other irregularities or error and cannot be relied on to identify weaknesses in internal controls.
2.5 Since we will not carry out an audit, nor confirm in any way the accuracy or reasonableness of the accounting records maintained by the charity, we are unable to provide any assurance as to whether the accounts that we prepare from those records present a true and fair view. We will, however, advise you on whether your records are adequate for the preparation of accounts and recommend improvements.
2.6We have a professional duty to compile accounts that conform with generally accepted accounting principles from the accounting records and information and explanations given to us. Furthermore, as directors of the charitable company/ trustees of the charity, you have a duty to prepare accounts that comply with the relevant legislation and applicable accounting standards. Where we identify that the accounts do not conform to accepted accounting principles, or if the accounting policies adopted are not immediately apparent, this will need to be disclosed in the accounts.
2.7 We also have a professional responsibility not to allow our name to be associated with accounts which we believe may be misleading. Therefore, although we are not required to search for such matters, should we become aware, for any reason, that the accounts may be misleading, we will discuss the matter with you with a view to agreeing appropriate adjustments and/or disclosures in the accounts. In circumstances where adjustments and/or disclosures that we consider appropriate are not made or where we are not provided with appropriate information, and as a result we consider that the accounts are misleading, we will withdraw from the engagement.
2.8 As part of our normal procedures, we may request you to provide written confirmation of any information or explanations given by you orally during the course of our work.
2.9 In common with all accountancy and legal practices, we are required by the Proceeds of Crime Act 2002 and the Money Laundering Regulations to:
• have due diligence procedures for the identification of all clients;
• maintain appropriate records of evidence to support customer due diligence; and
• report in accordance with the relevant legislation and regulations.
3. FORM OF THE ACCOUNTANTS’ REPORT
3.1We shall report to the Board of Directors of the charitiable company/Trustees of the charity, with any modifications that we consider may be necessary, that in accordance with this engagement letter and in order to assist you to fulfil your responsibilities, we have compiled, without carrying out an audit, the accounts from the accounting records and from the information and explanations supplied to us. The report should not be used for any purpose other than as set out in this engagement letter. To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the Board, as a body, for the whole of this report.
Updated November 2017