COMPILATION OF STATUTORY FINANCIAL STATEMENTS (LLP)
The purpose of this schedule to our engagement letter is to set out the basis on which we are to compile the statutory financial statements for the limited liability partnership.
1. RESPONSIBILITIES OF THE MEMBERS
1.1As members of the limited liability partnership you are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and to enable you to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). You are also responsible for preparing financial statements which give a true and fair view, have been prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) and regulations made under it.
1.2 In preparing the financial statements, 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 financial statements on the going concern basis unless it is inappropriate to presume that the limited liability partnership will continue in business.
You also have a responsibility not to approve these financial statements unless you are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss of the limited liability partnership.
1.3 You have instructed us to prepare abridged accounts under The Small Limited Liability Partnerships (Accounts) Regulations 2008 as amended by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016. Your responsibilities as members are to obtain the necessary consents and ensure the required statement is delivered to the registrar.
1.4 You are responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
1.5 You are also responsible for determining whether, in respect of the year, the limited liability partnership meets the conditions for exemption from an audit of the accounts set out in section 477 [or 479A or 480] of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008), and for determining whether, in respect of the year, the exemption is not available for any of the reasons set out in sections 478 and 479 [479B or 481].
1.6 You are responsible for ensuring that the limited liability partnership complies with the laws and regulations that apply to its activities, and for preventing non-compliance and for detecting any that occurs.
1.7 You have undertaken to make available to us, as and when required, all the limited liability partnership’s accounting records and related financial information, including minutes of management and members’ meetings necessary for the compilation of the accounts. You will make full disclosure to us of all relevant information.
1.8 Where applicable, you have agreed that your staff will be responsible for:
• keeping the record of receipts and payments;
• reconciling the balances monthly with the bank statements;
• keeping posted and balanced the purchase and sales ledgers;
• preparing a detailed list of ledger balances;
• preparing details of the annual stocktaking suitably priced and extended.
1.9 Where financial information is to be published, which includes a report by us or is otherwise connected to us, on the limited liability partnership’s website or by other electronic means, it is your responsibility to advise us of the intended electronic publication before it occurs and to ensure that any such publication properly presents the financial information and our report. We reserve the right to withhold consent to the electronic publication of our report if it, or the financial statements, are to be published in an inappropriate manner. It is your responsibility to ensure there are controls in place to prevent or detect quickly any changes to that information. We are not required to review such controls nor to carry out ongoing reviews of the information after it is first published. The maintenance and integrity of the limited liability partnership’s website is your responsibility and we accept no responsibility for changes made to such information after it is first posted.
2. RESPONSIBILITIES OF THE ACCOUNTANTS
2.1 As the limited liability partnership is totally exempt from audit, we have no statutory responsibilities to the limited liability partnership at all. Our only responsibilities arise from those specifically agreed upon between us in respect of other professional services.
2.2 You have asked us to help you prepare the financial statements in accordance with the requirements of the Companies Act 2006 (as applied to LLPs) and with the Statement of Recommended Practice, Accounting by Limited Liability Partnerships. We will compile the annual financial statements for your approval based on the accounting records maintained by you and the information and explanations given to us by you. We shall plan our work on the basis that no report on the financial statements 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 or reviews.
2.3 You have advised us that the limited liability partnership is exempt from an audit of the financial statements. We will not check whether this is the case. However, should our work indicate that the limited liability partnership is not entitled to the exemption, we will inform you of this.
2.4 Our work will not be an audit of the financial statements in accordance with the International Standards on Auditing (UK). Consequently, our work will not provide any assurance that the accounting records or the financial statements are free from material misstatement, whether caused by fraud, other irregularities or error and cannot be relied on to identify weaknesses in internal controls.
2.5Since we will not carry out an audit, nor confirm in any way the accuracy or reasonableness of the accounting records maintained by the limited liability partnership, we are unable to provide any assurance as to whether the financial statements 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 financial statements and recommend improvements.
2.6 We have a professional duty to compile financial statements that conform with generally accepted accounting principles from the accounting records and information and explanations given to us. Furthermore, as members, you have a duty to prepare financial statements that comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice (UK GAAP)), including the Statement of Recommended Practice: Accounting by Limited Liability Partnerships. Where we identify that the financial statements do not conform to UK GAAP or if the accounting policies adopted are not immediately apparent this will need to be disclosed in the financial statements.
2.7 We also have a professional responsibility not to allow our name to be associated with financial statements 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 financial statements may be misleading, we will discuss the matter with you with a view to agreeing appropriate adjustments and/or disclosures in the financial statements. 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 financial statements are misleading, we will withdraw from the engagement.
2.8As 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.
3. FORM OF THE ACCOUNTANTS’ REPORT
3.1We shall report to the members, 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 financial statements from the accounting records of the limited liability partnership and from the information and explanations supplied to us. To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the limited liability partnership and the limited liability partnership’s members, as a body, for the work or for this report.Updated September 2018