2. OUR RESPONSIBILITIES
2.1As the company is totally exempt from audit, we have no statutory responsibilities to the company 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 compile the financial statements in accordance with the requirements of the Companies Act 2006 as applicable to a micro-entity, and for preparing accounts for filing with the Registrar of Companies. 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 and in accordance with FRS 105. As you have advised us that the company qualifies as a micro-entity and that you wish to take advantage of the provisions in Companies Act 2006 applicable to micro-entities, these financial statements will comprise only micro-entity minimum accounting requirements unless you specifically request that an item of information additional to the minimum requirements is included. Where such a request is made, you are reminded that regard must be had to any provision of an accounting standard which relates to that item.
2.3 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.
2.4 You have advised us that the company 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 company is not entitled to the exemption, we will inform you of this.
2.5 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.
2.6 Since we will not carry out an audit, nor confirm in any way the accuracy or reasonableness of the accounting records maintained by the company, 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.
2.7 We have a professional duty to compile financial statements that conform with generally accepted accounting principles as applicable to a micro-entity from the accounting records and information and explanations given to us. Furthermore, as directors, you have a duty to prepare financial statements that comply with the Companies Act 2006, regulations made under that Act and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice (UK GAAP)), all as applicable to a micro-entity. Where we identify that the financial statements do not conform to UK GAAP as applicable to a micro-entity, we will discuss the matter with you with a view to agreeing appropriate adjustments in the financial statements.
2.8 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 in the financial statements. In circumstances where adjustments 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.
2.9 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.
2.10 Under the Companies Act 2006, the filing deadline is 9 months after the year end and late filing of accounts attracts significant financial penalties. As a result, whilst we will endeavour to produce your accounts as quickly as possible, we cannot guarantee to produce your accounts within the filing deadlines unless you provide us with all the necessary information at least 2 months before the filing deadline. Any late filing penalties that you incur as a result of delivery of the accounting records and information to us within 2 months of the filing deadline will be your sole responsibility.
3. FORM OF THE ACCOUNTANTS’ REPORT
3.1 We shall report to the Board of Directors, 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 company 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 company and the company’s Board of Directors, as a body, for the work or for this report.
Updated December 2020