Terms of Engagements

LETTER OF ENGAGEMENT – COMPILATION AND TAXATION SERVICES

General interpretation

The context otherwise requires, references to “we”, “us” and “our” are references to Knobloch & Associates Limited (including its staff, successors and all Delegated Parties) and references to “you” and “your” are references to the person whose name appears in this Agreement as the Client, including that persons’ administrators, executors and successors.

Terms of Engagement

This letter is to confirm our understanding of the terms of our engagement and the nature and extent of the services we will provide.  Unless otherwise agreed between us in writing, this letter records the entire agreement between us in relation to our engagement.  The terms recorded in this letter will remain in force until varied by us in writing to you, or until cancelled by either of us by notice in writing to the other.

On the basis of information and instructions you provide, we will compile any required financial statements for you.  This engagement will be performed in accordance with Service Engagement Standard No. 2 Compilation of Financial Information (SES-2) issued by Chartered Accountants Australia & New Zealand.  SES-2 specifies that on completion of the engagement we will issue a compilation report and an appropriate disclaimer which will form part of the financial statements.

The services to be provided will include all matters ancillary to those services such as, for example, dealing with and responding to queries raised by the Inland Revenue Department.

This letter of engagement will apply in respect of your financial year ended 31 March 2022 and for future years unless otherwise agreed.

Extent of Services

We will not audit, review or carry out any other checks on the accuracy or completeness of the information you provide.  It is up to you to give us accurate and complete information to enable us to provide the services described in this letter and we accept no liability for the accuracy or completeness of any information supplied by you in any form.  Accordingly, no assurance on any assertions contained in the financial information compiled will be provided.

Our engagement does not include the investigation or discovery of internal control weaknesses, errors, illegal acts or other irregularities, including without limitation, fraud, or non compliance with laws and regulations.   However, we will inform you of any such matters which come to our attention during the course of our engagement.

The information you are to supply and any other information that we consider necessary to complete the engagement must be provided in a timely manner in order for the assignment to be completed on a timely basis.

If the services to be provided include tax compliance services, then the following will apply:

• Our office address will be used as the mailing address for assessments and/or correspondence from Inland Revenue. We will send you copies of any letters received along with recommendations for your reply if necessary.
• We will check the assessments and let you know the amounts and due dates of tax instalments. You are then responsible for paying the correct tax on time.
• In the case of tax compliance services our function is limited to providing you with information and advice to aid you in making decisions about your tax. However, the ultimate responsibility for making those decisions remains with you.
• You are responsible for what appears in your tax returns. This means you must ensure that the information you give us is accurate and complete.
• You are ultimately responsible for paying any Inland Revenue Department penalties arising from late payments, errors, wrong estimates or any other reason.

Ownership of Work Papers

Material that you provide to us remains yours and will be returned to you when the engagement is completed.  Work papers that we create, and any third-party correspondence shall remain our property.

Where we provide taxation services for you, we will store tax records that we hold on your behalf for a period of seven years after the applicable balance date.  At the end of that period, unless you ask us to send that information to you, the records will be destroyed using a secure document destruction service.

Independence

Independence is not required for a compilation engagement.  If we are aware that we are not independent of the entity for which we are preparing financial statements, this fact will be stated in our compilation report.  However, we will not conduct a comprehensive review to determine whether we are or are not independent of the entity.

Use and Distribution of the Financial Information

We understand that the intended use and distribution of the financial information we will compile is for taxation purposes.  If this should change in any material respect, you will inform us immediately.

You may make copies of any reports for your own internal use or for providing to a third party.  However, we accept no duty or responsibility to any party other than yourself who may seek to rely on our reports and furthermore you indemnify us against any claim by such other party in respect of the reports.

Information and Disclosure

All assignments will be conducted in accordance with the professional standards, rules and ethical requirements of Chartered Accountants Australia & New Zealand.  Information we obtain in the course of this engagement is subject to confidentiality requirements, in addition to our obligations under the Privacy Act 2020 (“the Act”).  The personal information supplied by you will be retained by us in terms of the Act and will be used for the accounting services you have requested. You have the right to see all personal information held about you by us and you have the right to access your information at any time. If the information held about you is inaccurate, you have the right to request a correction. With your consent by signing this letter of engagement, such information may be used to further our relationship with you, which may be other services or information that may be of interest. This may be in the form of client newsletters, brochures or offers sent by post or email. Subject to any compliance, statutory or regulatory requirements, the information held will not be disclosed without your consent to anyone outside of the company. For full details please refer to our website at https://www.knobloch.co.nz/privacy-policy/.  In order for us to perform your assignments efficiently we require authority to liaise with both the Inland Revenue Department and other financial institutions that you are connected to.

So that we comply with the Act, the Tax Administration Act 1994 (to the extent that it applies) and any other law relating to privacy while providing services to you, you agree to complete and execute the Authority to Disclose and Receive Information forms attached to this letter.  We may ask you for other authorisations if necessary.

Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“AML/CFT Act”)

As accountants we are required to comply with the AML/CFT Act in certain circumstances regarding our services.

The AML/CFT Act requires us to:

(a)        carry out due diligence on the identity of its clients (and, in some cases, on their source of funds or wealth) (Customer Due Diligence).

(b)        report any suspicious activity involving its clients or the transactions they undertake; and

(c)        keep detailed records.

Where required, you authorise us to perform identification checks either manually or via electronic means.

Limitation of Liability

At all times we will use reasonable skill and care in providing our services to you.  However, in spite of this our liability to you whether in contract, tort, equity or otherwise, for any loss or damage or expenses (including legal costs) suffered or incurred directly by you as a direct result of any act or omission by us in providing our services, shall be limited to a maximum amount equal to three times the fee (excluding GST, disbursements and expenses) paid to us by you in respect of the services in question.  If the Services were provided in respect of more than one financial year the fee on which the liability amount is based shall be the fee paid in respect of the financial year in respect of which the act or omission occurred. Any claim against us must be brought within twelve months of the date on which we complete the services.

Money We Hold for You
We may sometimes hold money on your behalf.  It will be held in trust in a client bank account, which is completely separate from the firm’s funds. Chartered Accountants Australia & New Zealand has strict rules about the way accountancy firms must handle their clients’ money and we follow these rules.

Fees and Payment

Unless otherwise agreed, our fees are determined on the basis of the time spent on the assignment by our team, the levels of skill and responsibility involved, the importance of the matter and the results achieved, the urgency and time constraints involved, the complexity of the assignment, the risks involved, the experience, reputation and ability of the personnel carrying out the work, the reasonable costs of running the firm, and fees customarily charged in the market for similar services.

Our invoices will generally be issued on a monthly basis and all invoices will be due for payment on the 20^th of the month following invoice date.  We reserve the right to charge interest on overdue amounts at a rate of 2% per month from the date the invoice was due.  If in the event your account is referred to a debt collection agency or solicitor, please be aware that any collection costs, commissions, legal costs, or any other incidental costs paid by us associated with the collection of your account will be recoverable from you.

You should be aware that, like all other providers of services, we are entitled to retain possession of your records that have been used in relation to this engagement until outstanding fees are settled.  You also consent for a lien and deduction of fees due from refunds received from the Inland Revenue Department.  Please be aware that we also reserve the right to refuse to complete any further work until any outstanding fees are paid.

In the case of a limited liability company or other entity the undersigned also personally guarantees the payment of fees.

Future Years

This letter applies for future years unless you or we wish to end or change the arrangement.

Conclusion

If you have any questions regarding this letter of engagement, please do not hesitate to call us.  It is a requirement of Chartered Accountants Australia & New Zealand that we provide you with this letter and that you return a signed copy to us.  In order to signify your acceptance of the terms of engagement, please sign the copy of this letter that is attached and return it to us.