Management Accounts

If we have agreed to provide a Management Accounts service, the terms for this service are set out below.

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Management Accounts Engagement Letter

The purpose of this engagement letter is to set out the basis on which we are to prepare management accounts to assist you in monitoring the on-going trading position of your business.

1 Your responsibilities

1.1 Unless we have also agreed to carry out a bookkeeping service you are responsible for all the day-to-day accounting work. This will include:
– keeping the record of receipts and payments;
– reconciling your records with the bank statement;
– maintaining records of debtors and creditors;
– carrying out or arranging for a valuation of the period-end stock levels; and
– preparing details of any period-end work-in-progress.

1.2 You agree to make your accounting records and related financial information available to us in line with the requests we make. You recognise that a failure to do so could have an impact on the price or the speed of our work.

1.3 Even if we have not directly requested it, you agree to disclose to us in full any information that is relevant to the management accounts.

1.4 You will approve and sign the management accounts to acknowledge responsibility for them, including providing us with all information and explanations necessary for their compilation.

1.5 [Removed]

1.6 Our report is prepared solely for your confidential use and solely for the purpose set our above. You may not rely upon it for any other purpose whatsoever. Our report must not be made available, copied or recited to any other party. We neither owe nor accept any duty to any other party and shall not be liable for any loss, damage or expense of whatsoever nature which is caused by their reliance on our report.

1.7 You are responsible for the following general business and financial matters:
– ensuring that, to the best of your knowledge and belief, financial information used by your business or for the management accounts is accurate and complete;
– ensuring that the activities of your business are being conducted honestly;
– safeguarding the assets of your business and taking reasonable steps for the prevention and detection of fraud; and
– ensuring your business complies with the laws and regulations that apply to its activities, as well as preventing non-compliance and detecting any that occurs.

2 Our responsibilities

2.1 We will prepare the management accounts based on the accounting records you maintain. We will also rely on any information and explanations you give us.

2.2 We will not be carrying out an audit on the management accounts. This means that we will not produce a report that verifies the assets, liabilities, income or expenditure of your business.

2.3 We will not include an accountant’s report in the management accounts.

2.4 We would like to emphasise that we cannot undertake to discover any shortcomings in your systems or any irregularities on the part of your employees. However we will advise you if we come across anything of this nature in the course of preparing the management accounts.

2.5 We have a professional responsibility not to allow our name to be associated with management 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 remain misleading, we will withdraw from the engagement. In these circumstances you agree that we have a right to invoice you for our time spent preparing and discussing the accounts with you as well as time spent on any other work that is not completed as part of our resignation.