Sie sind auf Seite 1von 7

R. P.

MORA Accounting and Law Office

Certified Public Accountant Attorney-at-Law

No. 2 Don J. Llorente St., Capitol Site

6000 Cebu City, Philippines Tel. No. : (032) 255-4960 Email: Cell No. : 09275728150 _______________________________________________________________________________________________

June 28, 2008

s r o t c e r i D f o d r a o B e h T

Mactan Economic Zone I Lapulapu City, Cebu, Philippines


President Sir: At your request, we are pleased to submit our engagement proposal to provide professional services to (hereinafter referred to as the ).
y n a p m o C d e m r o f r e p e b o t k . r c o n I w , s e e i h t t r e g p n i o d r n P a t M s r & e S d n U . 1

1.1 Scope of work Year-End Audit Our work will consist of an audit of the financial statements of the Company as of and for the year ending March 31, 2009. We will conduct the audit in accordance with Philippine Standards on Auditing with the objective of expressing an opinion as to whether the preparation and presentation of the financial statements, taken as a whole, conforms to Philippine Financial Reporting Standards. In conducting the audit, we will perform tests of the accounting records and such other procedures as we consider necessary in the circumstances to provide a reasonable basis for our opinion on the financial statements. We will also assess the accounting principles used and significant estimates made by management, and evaluate the overall financial statements presentation. Our report will be addressed to the Board of Directors and Stockholders of the Company. We cannot provide assurance that an unqualified opinion will be rendered. Circumstances may arise in which it is necessary for us to modify our report or withdraw from the engagement. In such circumstances, our findings or reasons for withdrawal will be communicated to the Board of Directors and Stockholders. Our audit is planned and performed to obtain reasonable, but not absolute assurance on whether the financial statements are free of material misstatement, whether caused by error or fraud. Absolute assurance is not attainable because of the nature of audit evidence and the characteristics of fraud. Therefore, there is a risk that material errors, fraud (including fraud that may be an illegal act), and other illegal acts may exist and not be detected by an audit performed in accordance with Philippine Standards on Auditing.

t .

n c

e n

d I

i ,

f s

n e

o i t

C r e

d p

n o

a r

e P

a M

r &


R. P. MORA Accounting and Law Office

Certified Public Accountant Attorney-at-Law

Also, an audit is not designed to detect matters that are immaterial to the financial statements. In planning and performing our audit, we will consider the Companys internal control in order to determine the nature, timing and extent of our audit procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on internal control. While we are not being engaged to report on the Companys internal control and are not obligated to search for reportable conditions, we will communicate reportable conditions to you to the extent they come to our attention. Reportable conditions are significant deficiencies in the design or operation of internal control which could adversely affect the organizations ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements. The definition of reportable conditions does not include potential future internal control problems (i.e., control problems coming to our attention that do not affect the preparation of financial statements for the period under audit). To the extent that they come to our attention, we will inform management about any material errors and any instances of fraud or illegal acts. Further, to the extent that they come to our attention, we will inform the Board of Directors about fraud and illegal acts that involve senior management, fraud that in our judgment causes a material misstatement of the financial statements, and illegal acts, unless clearly inconsequential, that have not otherwise been communicated to the Board of Directors. Interim Audit As a firms practice for a new client and to give value-added service, we will conduct an interim audit, the primary objective of which is the understanding and testing of the Companys significant accounting policies, procedures and internal controls, as well as performing interim audit test on significant accounts identified during test of internal controls. The cut-off interim period to be tested will be agreed with you in a separate communication or in a meeting. If warranted, we will issue management letter report detailing reportable conditions that will come to our attention during the interim audit. 1.2 Reporting and deliverables We will report to the Companys Stockholders and Board of Directors whether in our opinion the preparation and presentation of the financial statements conform to Philippine Financial Reporting Standards, including: o fair presentation, in all material respects, of the Companys financial position and results of its operations and its cash flows complying with the financial reporting standards in the Philippines and other mandatory reporting requirements of the Bureau of Internal Revenue (BIR) and the Securities & Exchange Commission (SEC)

R. P. MORA Accounting and Law Office

Certified Public Accountant Attorney-at-Law

In addition, we will issue a management letter, if warranted, detailing our findings, comments and recommendations for improving the Companys internal control and financial and administrative procedures. 1.3 Timetable Current regulation requires your audited financial statements to be filed with the BIR on or before the 15th day of the 4th month following the close of the financial year and with the SEC 15 days thereafter. Specific details of the agreed timetable will be set out in a separate communication or in a planning meeting.
s y t

The management of the Company is responsible for the fair presentation, in accordance with Philippine Financial Reporting Standards, of the financial statements and all representations contained therein including adequacy of disclosures. Management is also responsible for identifying and ensuring that the Company complies with laws and regulations applicable to its activities, for preventing and detecting fraud, for adopting sound accounting policies, and for establishing and maintaining effective internal control over financial reporting to maintain the reliability of the financial statements and to provide reasonable assurance against the possibility of misstatements that are material to the financial statements. Management agrees that all records, documentation, and information we request in connection with our audit will be made available to us, that all material information will be disclosed to us, and that we will have the full cooperation of Companys personnel. As required by Philippine Standards on Auditing, we will make specific inquiries of management about the representations embodied in the financial statements and the effectiveness of internal control over financial reporting, and obtain a representation letter from management about these matters. SEC regulations make it an offense for an officer of the Company to provide false or misleading information to us. The responses to our inquiries, the written representations, and the results of audit tests, among other things, comprise the evidential matter we will rely upon in forming an opinion on the financial statements. Management is responsible for adjusting the financial statements to correct material misstatements and for affirming to the auditor in the representation letter that the effects of any uncorrected misstatements aggregated by the auditor during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements being reported upon taken as a whole.
s e e

We estimate our professional fee, exclusive out of pocket expenses (OPEs), to be . This estimate is based on the level of specialization of the individuals who will perform the audit.
i S
) 0 0 0


n ,

0 6

M P d H n P a

s s

r o

o s

t e

c P

i d

D n a s

. . h

R. P. MORA Accounting and Law Office

Certified Public Accountant Attorney-at-Law

The above professional fee will be billed you as follows: Monthly retainer from September 2008 to May 2009 (P4,000 per month for 9 mos.) P 36,000 Upon completion of work and submission of report (40%) 24,000
0 0 0

OPEs which usually consist of transportation and meals allowance for overtime, traveling, costs of report reproduction, mailing, telephone and fax charges and photocopying costs, as applicable, will be billed separately. We propose to bill you a fixed OPEs of 12% on the (60,000 x 12%). professional fee or Our estimate of time requirements is based on the assumption that the Company will provide in a timely manner the schedules and supporting information, as well as working space and clerical assistance that may be required to facilitate the audit. Circumstances encountered during the performance of our audit that warrants additional time or expense could cause us to unable to complete the audit within the above estimate. We will endeavor to notify you of any such circumstances as they are assessed.
s e c i v r e s r e h t
O 0 0 2

We will be pleased to provide any additional services, such as bookkeeping, internal audit or other special audit, and/or corporate secretary services, that may be required from time to time, provided such services do not impair our independence. However, this Engagement proposal applies only to the work described in this letter. Separate terms of engagement will have to be agreed upon should further work be required over and above such work. In particular, this letter does not deal with letters of accounting advice or other reports as required by pertinent regulations.
s n o i t i d n o c d n a s m r e t r e h t

5.1 Our obligations We must use all reasonable efforts to complete the services within the set time. We will perform the services with due care, competence and diligence. However, the quality of the services will depend also on the performance by you of your obligations as discussed below. 5.2 Your obligations In a timely fashion, you shall give us the following: 1. information we are entitled for access to necessary information involving the engagement; and,

P ,


. .

4 5

R. P. MORA Accounting and Law Office

Certified Public Accountant Attorney-at-Law


records and system we should be provided with schedules and documents and we should have an access to books of accounts, files, records, documents and information technology system, to premises and to people (whether management or staff) with relevant skills and experience.

5.3 Delays We will not be liable for any failure or delay in performing the services if that failure or delay arises from anything beyond our control - including the untimely performance by you of your obligations as discussed above. In addition, we are entitled to review our fees and, if the delay is substantial, terminate this Agreement. 5.4 Confidentiality Both of us agree to take reasonable steps to maintain (within our respective organizations) the confidentiality of any proprietary or confidential information of the other. 5.5 Termination The engagement will be terminated when the services have been provided. However, either party may terminate the engagement upon fifteen (15) days prior written notice to the other party. If this occurs, you will be invoiced for time and expenses incurred up to the termination date together with reasonable time and expenses incurred to bring the services to a close in a prompt and orderly manner.

Upon termination for any reason, the parties shall return each others confidential information, except that we may retain a set of its working papers even if they contain confidential information of the client. * * *

We shall be pleased to discuss this letter with you at any time. For your convenience in confirming these arrangements, we enclose a copy of this letter. Please sign and return to us. Very truly yours,


A e

A n

e h

M . . y t P t . A

R. P. MORA Accounting and Law Office

Certified Public Accountant Attorney-at-Law

The terms and conditions of this proposal have been read and understood by the Board of Directors and I am authorized on behalf of the Board to accept them for, and on behalf of, .
c n I , s e i t r e p o r P M & S


(Name and Position)



(Name and Position)


R. P. MORA Accounting and Law Office

Certified Public Accountant Attorney-at-Law

No. 2 Don J. Llorente St., Capitol Site

6000 Cebu City, Philippines Tel. No. : (032) 255-4960 Email: Cell No. : 09275728150 _______________________________________________________________________________________________