Date
The Managing Director
Lagos
ATTENTION:
Dear Sir
Letter of
Engagement
statutory Audit- Year Ended 31 December,
2011
We
thank you for the opportunity given to us to act as your Company’s statutory
auditors. The immediate assignment is to audit the financial statements of
-
The
scope of the services we will perform
-
The
responsibilities which both parties will assume in relation to the services
discussed in this letter,
-
Our
fee structure.
Scope of the Engagement
a) Our functions as auditors under
Section 357 of Companies and Allied Matters Act (CAMA) 1990 is to examine the
accounts presented to us by the Directors.
As auditors, we are not responsible for the preparation of the accounts
presented to us, nor for the maintenance of the accounting records of the
Company, which duties are imposed on the Directors by Section 334 of the
Act. Any accounting services we may
provide for you are distinct from our functions as auditors.
b) We shall, as required by
Schedule 6 to the CAMA 1990, report to the members whether in our opinion the
accounts of the Company, which have been prepared by you, give a true and fair
view of the state of the Company’s affairs as the date of the balance sheet,
and of the profit or loss for the period ended on that date, and whether those
accounts comply with the Companies and Allied Matters Act, 1990.
c) In arriving at our opinion, we
are required by law to consider the following matters but only to report on any
aspect of which we are not satisfied:
i, Whether proper books of account have been
kept by your Company.
ii, Whether your Company’s Balance Sheet and
Profit and Loss Account are in agreement with the books of account.
iii, Whether we have obtained all the information
and explanations which we think are necessary for the purposes of our audit.
d) In accordance with normal practice our audit will be planned primarily to disclose defalcations or other irregularities but their disclosure if they exist may well result from the audit tests we undertake.
e) The work we shall do to enable us form our
opinion referred to in ©
above will include:
(i)
Day
to day operations of the business.
(ii)
The
verification of assets and liabilities, but their nature and extent will vary
according to our assessment of your Company’s system of internal control, and
may cover all aspects of the business.
We shall report to the Directors
any material weakness in our observation on the Company’s system, which comes
to our notice, which we think, should be brought to their attention, and a copy sent to Central Company of Nigeria.
You
have agreed that your staff will be responsible for
(i)
Maintaining
records of receipt and payments of cash through cash and Company accounts.
(ii)
Reconciling
cash and Company balances monthly with Company statement(s).
(iii)
Maintaining
Income and Expenditure books and keeping these posted and balanced to date.(iv) Preparing detailed list of ledger balances monthly.
(v)
Maintaining
and balancing monthly petty cash records.
(vi)
Maintaining
suitable system for filing all income records and other items relating to the
accounting systems.
(vii) Preparing details of loans and
advances.
(viii) Preparing details at the
accounting date of prepayments, creditors and accruals.
(ix)
Summarizing
the accounting records as appropriate, prior to their being posted to the
ledger.
(x)
Completing
the posting to the ledger.
(xi)
Completing
the writing up of your books and records in so far as they are incomplete when
presented to us.
(xii) Preparing draft accounts.
In dealing with our work of
auditing the financial statements, we shall conduct tests of the records and
make further enquiries as are necessary to enable us prepare the accounts.
Our work must not be relied upon
to disclose defalcations or other irregularities, which may exist but their
disclosure, if they do exist, may well result from the tests we normally
undertake in course of our audit.
Fees/Structure
Our
fee for services under this assignment shall be N including reimbursable, but excluding
VAT
Please
confirm that these terms and arrangements are satisfactory and in accordance
with your understanding of what you expect from us, and arrange for the enclosed
copy to be countersigned on behalf of the company and returned to us as soon as
possible. We would be pleased to clarify any queries you may have prior to your
signing the letter.
Yours
faithfully,
For:
M. A. Adelanwa
Managing Partner
ACCEPTANCE
The above stated terms and conditions of
the contract are hereby acknowledged and accepted.
For:
Signature: …………..………………………………………
Date:
……………………………………………………………
Name: ………….………………………………………………
Designation:
…………………………….…………………
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