Engagement Terms & Conditions

Transcription

1 Engagement Terms & Conditions Under the requirements of our profession, we have prepared this written Engagement Terms & Conditions. Arkin & Associates, P.C. will provide professional accounting services as indicated based on the information that you furnish to us. This engagement is ongoing and may be amended from time to time in writing as agreed to by both of us. These terms and conditions are a part of the signed engagement letter that we have established with you. We may amend these terms from time to time. These terms and conditions apply to all engagements and by your utilization of our services, you agree to these Terms & Conditions. Bookkeeping and Non-Attest Services Beginning in 2016, we are changing the nature of our reporting of your financial statements. Unless you request that we perform a compilation engagement for you, the end result of which will be to prepare a compilation report on your financial statements on an Income Tax Basis with no disclosures, we will integrate your accounting data with the Fathom HQ portal. The Fathom HQ portal integrates your QuickBooks data into various management reports. The website states: Fathom provides a suite of in-depth analysis tools and metrics which help you see exactly how well your business is performing. These tools and metrics help to assess profitability, cash flow, growth and other key performance indicators (KPIs). Under the requirements of the Statements on Standards for Accounting and Review Services (SSARSs) 21, we will indicate that NO assurance is provided on these statements. Accordingly, the engagement will be considered a bookkeeping engagement only in which we enter general ledger transactions, process payments, maintain depreciation schedules and record the information into your accounting software system. Our report may state: The accompanying financial statements of [your company] for the period were not subjected to an audit, review, or compilation engagement by us and accordingly, we do not express an opinion, a conclusion, nor provide any assurance on them. Compilations On the other hand, you may need for us to issue to you a Compiled Financial Statement. If you do, we will issue your financials with the following understanding: You have requested that we prepare the financial statements of your company, which comprise the statement of assets, liabilities, and equity-tax-basis as of the various periods, and the related statements of income and expenses- tax basis, and various supplemental statements. These financial statements will not include a statement of cash flows-tax-basis and related notes to the financial statements. We are pleased to confirm our acceptance and our understanding of this compilation engagement by means of this letter. Our Responsibilities The objective of our engagement is to a) prepare financial statements in accordance with the tax basis of accounting based on information provided by you, and b) apply accounting and financial reporting expertise to assist you in the presentation of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements in order for them to be in accordance with the tax-basis of accounting. 1 Arkin & Associates, P.C. Engagement Terms & Conditions December 8, 2015

2 We will conduct our compilation engagement in accordance with Statements on Standards for Accounting and Review Services (SSARSs) promulgated by the Accounting and Review Services Committee of the AI CPA and comply with the AI CPA's Code of Professional Conduct, including the ethical principles of integrity, objectivity, professional competence, and due care. We are not required to, and will not, verify the accuracy or completeness of the information you will provide to us for the engagement or otherwise gather evidence for the purpose of expressing an opinion or a conclusion. Accordingly, we will not express an opinion, a conclusion, nor provide any assurance on the financial statements. Our engagement cannot be relied upon to identify or disclose any financial statement misstatements, including those caused by fraud or error, or to identify or disclose any wrongdoing within the entity or noncompliance with laws and regulations. A compilation differs significantly from a review or an audit of financial statements. A compilation does not contemplate performing inquiry, analytical procedures, or other procedures performed in a review. Additionally, a compilation does not contemplate obtaining an understanding of the company s internal control; assessing fraud risk; testing accounting records by obtaining sufficient appropriate audit evidence through inspection, observation, confirmation, or the examination of source documents (for example, canceled checks of bank images); or other procedures ordinarily performed in an audit. Accordingly, we will not express an opinion or provide any assurance regarding the financial statements being compiled. If for any reason, we are unable to complete the compilation of your financial statements, we will not issue a report on such statements as a result of this engagement. Your financial statements will be prepared using the Income Tax Basis of accounting, which is an Other Comprehensive Basis of Accounting, and our report will indicate this. Since your financial statements will not include footnote disclosures, our report will indicate this. The Supplementary information accompanying the compiled financial statements is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information will be compiled from information that is the representation of management. We will not audit or review the supplementary information and, accordingly, we will not express an opinion or provide any assurance on such data. Your Responsibilities The engagement to be performed is conducted on the basis that you acknowledge and understand that our role is to prepare financial statements in accordance with the income tax-basis of accounting and assist you in the presentation of the financial statements in accordance with the income tax-basis of accounting. You have the following overall responsibilities that are fundamental to our undertaking the engagement in accordance with SSARSs: a) The preparation and fair presentation of financial statements in accordance with the income taxbasis of accounting, b) The design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements, c) The prevention and detection of fraud, d) To ensure that the entity complies with the laws and regulations applicable to its activities, e) To make all financial records and related information available to us, and f) The accuracy and completeness of the records, documents, explanations, and other information, including significant judgments, you provide to us for the compilation engagement You are also responsible for all management decisions and responsibilities and for designating an individual with suitable skills, knowledge, and experience to oversee our preparation of your financial statements. You are responsible for evaluating the adequacy and results of the services performed and 2 Arkin & Associates, P.C. Engagement Terms & Conditions December 8, 2015

3 accepting responsibility for such services. We will indicate that we are not independent with respect to you. Our Report As part of our engagement, we will issue a report that will state that we did not audit or review the financial statements and that, accordingly, we do not express an opinion, a conclusion, nor provide any assurance on them. Other Services We may recommend third-party software or portals for ease of documentation or to assist you in conducting your business, such as QuickBooks, Fathom HQ, ThinkHR, Bamboo HR, and maybe other software or you may request that we use such software, or a third-party banks payroll portal. The use of any third-party portals and/or software will be considered at your request, and we do not warrant that the software or portal will meet your requirements or that their use will be uninterrupted or error-free. Further you agree that we will be responsible only for our own work, and not responsible for any problems with third party portals and/or software, and in the event that there is any issue as to the quality or performance of the software or portal, that risk is yours and not ours. Again, we are not in privity with or in any contractual relationship with the third-party software or portal providers on your behalf, and if we are brought into any proceeding or suit arising from an issue with the portal or software, not having to do with any act of Arkin and Associates, P.C., you agree to indemnify and hold us harmless as well as agree to defend us. Further, you agree that you will not consider us ever giving you legal advice or HR advice, other than as it pertains to accounting or tax advice. It is your sole responsibility to comply with employment laws. Also please be aware that we are not giving you advice regarding data privacy or legal compliance. Additionally, the Affordable Care Act (ACA) has a myriad of complex rules as it pertains to insurance and other HR issues. Arkin & Associates, P.C. will use our best effort to complete tax forms related to the ACA, but we are not responsible for your compliance with this law. You remain primarily responsible for compliance and agree to hold Arkin & Associates, P.C. harmless. Income Tax Preparation If you have engaged us to prepare your income tax returns, we will prepare your federal and state income tax returns from information you furnish us and we may process them with an outside computer service. We will not audit or otherwise verify the data you submit, although we may ask you to clarify some of the information. We will furnish you with questionnaires to help you gather and organize the necessary information for us, in order to keep our fee to a minimum. We must receive all information to prepare your return by March 15 th of each year for individual returns and February 15 th for entity returns, to ensure that your return will be completed by the due date. If we have not received all of your information by the above date, and your return is not completed by the normal due date, you may be subject to late filing or late payment penalties. It is your responsibility to maintain, in your records, the documentation necessary to support the data used in preparing your tax returns, including but not limited to the auto, travel, entertainment, and related expenses and the required documents to support charitable contributions over $250. If you have any questions as to the type of records required, please ask us for advice in that regard. It is also your responsibility to carefully examine and approve your completed tax returns before signing and mailing them to the tax authorities. We are not responsible for the disallowance of doubtful deductions or inadequately supported documentation, nor for resulting taxes, penalties and interest. Professional standards now require us to electronically file all federal and state individual income tax returns. Please note that although e-filing will require both you and our firm to complete additional steps, the same filing deadlines will apply. You must therefore ensure that you complete the additional requirements well before the due dates in order for our firm to be able to timely transmit your return. Our firm must transmit your return to the taxing authorities (rather than you). We will provide you with a copy of the income tax returns on our portal for your review prior to electronic transmission. After you have reviewed the returns, you must provide us with a signed authorization indicating that you have reviewed the return and that, to the best of your knowledge, you feel it is correct. We cannot transmit the returns to 3 Arkin & Associates, P.C. Engagement Terms & Conditions December 8, 2015

4 the taxing authorities until we have the signed authorization. Therefore, if you have not provided our firm with your signed authorization by the regular due date, we will place your return on extension, even though it might already have been completed. In that event, you will be responsible for ensuring that any payment due with the extension is timely sent to the appropriate taxing authorities. You will also be responsible for any additional costs our firm incurs arising from the extension preparation. However, you do have the right to opt out of the e-filing program if you so choose by completing and signing a federal opt out statement. The forms are available upon request and must be completed, signed, and returned to us before we can complete your returns. For entities, you are confirming to us that, unless we are otherwise advised, the travel, entertainment, gifts, and related expenses are supported by the necessary records required under Section 274 of the Internal Revenue Code. If you have any questions as to the type of records required, please ask us for advice in that regard. The law provides for a penalty to be imposed where taxpayers make a substantial understatement of their tax liability. Taxpayers may seek to avoid all or part of the penalty by showing (1) that they acted in good faith and there was reasonable cause for the understatement, (2) that the understatement was based on substantial authority, or (3) that the relevant facts affecting the item s tax treatment were adequately disclosed on the return. You agree to advise us if you wish disclosure to be made in your returns or if you desire us to identify or perform further research with respect to any material tax issues for the purposes of ascertaining whether, in our opinion, there is substantial authority for the position proposed to be taken on such issues in your returns. We are responsible for preparing only the returns that you have engaged us to prepare. Our fee does not include responding to inquiries or examination by taxing authorities. However, we are available to represent you. Our fees for such services are at our standard rates and would be covered under a separate engagement letter. We will use our judgment to resolve questions in your favor where a tax law is unclear if there is a reasonable justification for doing so. Whenever we are aware that a possibly applicable tax law is unclear or that there are conflicting interpretations of the law by authorities (e.g., tax agencies and courts), we will explain the possible positions that may be taken on your return. In accordance with our professional standards, we will follow whatever position you request, as long as it is consistent with the codes, regulations, and interpretations that have been promulgated. If the IRS should later contest the position taken, there may be an assessment of additional tax plus interest and penalties. Currently, the IRS and state taxing agencies are aggressive in assessing penalties. We assume no liability for any such additional penalties or assessments. In the event, however, that you ask us to take a tax position that in our professional judgment will not meet the applicable laws and standards as promulgated, we reserve the right to stop work and shall not be liable to you for any damages that occur as a result of ceasing to render services. Please note that any person or entity subject to the jurisdiction of the United States (includes individuals, corporations, partnerships, trusts, and estates) having a financial interest in, or signature or other authority over, bank accounts, securities, or other financial accounts having a value exceeding $10,000 in a foreign country, shall report such a relationship. Although there are some limited exceptions, filing requirements also apply to taxpayers that have direct or indirect control over a foreign or domestic entity with foreign financial accounts, even if the taxpayer does not have foreign account(s). For example, a corporate-owned foreign account would require filings by the corporation and by the individual corporate officers with signature authority. Failure to disclose the required information to the U.S. Department of the Treasury may result in substantial civil and/or criminal penalties. If you and/or your entity have a financial interest in any foreign accounts, you are responsible for providing our firm with all the information necessary to prepare FinCen Form 114 or other forms required by the U.S. Department of the Treasury and the IRS. If you do not provide our firm with information regarding any interest you may have in a foreign account, we will not be able to prepare any of the required disclosure statements. 4 Arkin & Associates, P.C. Engagement Terms & Conditions December 8, 2015

5 Payroll Tax Returns We will prepare your periodic payroll and the related income tax returns, if you have engaged us to do so. Under no circumstances are we to be considered a Responsible Party as that term is understood in the Internal Revenue Code. You are responsible for submitting to us on a timely basis, the information necessary to prepare the periodic payroll. You are also responsible for paying all payroll taxes, Worker s Compensation premiums, health insurance and any other benefits or taxes related to payroll. We are not a Professional Employment Organization (PEO) and we will not and do not employ any of your staff. We merely prepare the payroll as directed by you and remit taxes as your agent as directed by you. You agree to hold us harmless for any IRS, DOL, or other penalties or costs related to the HR function. Other Relevant Information for All Engagements You agree to hold us harmless and to release, indemnify and defend us from any liability or costs, including attorneys' fees, resulting from management's or your knowing misrepresentations to us. It is your responsibility to provide information to us in a timely manner and we will not be responsible for your inability to do so. It is your responsibility to provide all the information required for the preparation of a complete and accurate return and financial statements. You should retain all documents, cancelled checks and other data that form the basis of your income and expenses for a minimum of 7 years and in some circumstances for a longer period. These may be necessary to prove the accuracy and completeness of the returns to a taxing authority. We recommend that you keep all tax returns and items affecting the basis of your assets forever. Under Georgia law and CPA ethics, you have a right to all of your source and original documents. However, you do not have a right to our workpapers, analyses, nor electronic copies of data prepared by our software. Should you use QuickBooks and you have a valid license, you have the right to the last QuickBooks backup data files that we may have. We will either send you paper copies of the work prepared by our office or we will place this work on our portal. Should you require additional copies of the documents we have prepared, there may be an additional charge. Accordingly, you should carefully store this information. We will keep your documents available on our portal for 30 days should you terminate our services. These documents may be copied to your Computer. Arkin & Associates, P.C. will retain copies of these documents for a short period, and none held by us would be protected as "privileged" information if subpoenaed by the IRS. You are also responsible for the accuracy of your income tax returns; therefore, you will want to review them carefully before signing them. Arkin & Associates, P.C. will use its professional judgment in resolving questions where the tax law is unclear, or where there may be conflicts between taxing authorities, interpretations of the law and other supportable positions. Unless otherwise instructed by you, we will resolve such questions in your favor whenever possible. Should the IRS later contest the position taken, there may be an assessment of additional tax, plus interest and penalties. We assume no liability for any such additional penalties or assessments. Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts. However, we will inform the appropriate level of management of any material errors, and of any evidence or information that comes to our attention during the performance of our compilation procedures that fraud may have occurred. We have no responsibility to identify and communicate deficiencies in your internal control as part of this engagement. Since we are not attorneys, we are not responsible to disclose illegal activities. However, if during the course of our engagement we may, but are not required to, recommend that you seek legal counsel for guidance as to whether any actions on the part of the Company are illegal. If, during our work, we discover information that affects prior-year tax returns, we will make you aware of the facts. However, we cannot be responsible for identifying all items that may affect prior-year returns. If you become aware of such information during the year, please contact us to discuss the best resolution of the issue. We will be happy to prepare appropriate amended returns as a separate engagement. 5 Arkin & Associates, P.C. Engagement Terms & Conditions December 8, 2015

6 Certain communications involving tax advice may be privileged and not subject to disclosure to the IRS. By disclosing the contents of those communications to anyone, or by turning over information about those communications to the government, you, your employees, or agents may be waiving this privilege. To protect this right to privileged communication, please consult with us or your attorney prior to disclosing any information about our tax advice. Should we receive any request for the disclosure of privileged information from any third party, including a subpoena or IRS summons, we will notify you, if permitted by law. In the event you direct us not to make the disclosure, you agree to hold us harmless from any expenses incurred in defending the privilege, including, by way of illustration only, our attorney s fees, court costs, outside adviser s costs, or penalties or fines imposed as a result of your asserting the privilege or your direction to us to assert the privilege. Furthermore, the parties agree that if an unanticipated need arises (such as, but not limited to, an audit by a taxing agency, or any other exogenous service not anticipated in this agreement by the parties), Arkin & Associates, P.C. hereby agrees to perform this additional work at a price mutually agreed upon before the service is provided. This service will be billed separately, as part of a change order, and will be payable upon presentation (or payable upon terms mutually agreed upon). In the event of a tax examination or correspondence, we may represent you if requested, but these services are charged separately. During the course of our engagement, we will request information and explanations from you regarding your tax return. In view of the foregoing, you agree to release our firm and its personnel from any liability and costs relating to our services under this letter resulting from false or misleading representations made to us by you. In addition, you agree to indemnify and hold harmless our firm and its personnel from any claims, including costs and expenses, as a result of the services performed under this engagement for third party lawsuits. You agree to, and hereby consent to participate in our Peer Review program as administered by the American Institute and the Georgia Society of Certified Public Accountants. As a result of our prior or future services to you, we might be requested to provide information or documents to you or a third party in a legal, administrative, arbitration, or similar proceeding in which we are not a party. If this occurs, our efforts in complying with such requests will be deemed billable to you as a separate engagement. We shall be entitled to compensation for our time and reasonable reimbursement for our expenses (including legal fees) in complying with the request. For all requests we will observe the confidentiality requirements of our profession and will notify you promptly of the request. You may be asked to disclose your tax return information or financial statements to third parties. We will not respond to these outside requests from third parties. Should you request, we will send copies of your tax return to you and you may decide whether to disclose the returns to third parties. (The prior returns and financial statements are available for your download on our portal.) This disclosure does not constitute privity or any contractual or other relationship between us and the third party and you agree to hold us harmless. Because there are inherent difficulties in recalling or preserving information as the period after an engagement increases, you agree that, notwithstanding the statute of limitations of the State of Georgia, any claim based on this engagement must be filed within 12 months after performance of our service, unless you have previously provided us with a written notice of a specific defect in our services that forms the basis of the claim. In accordance with our firm policies, work may be suspended if your account becomes 45 days or more overdue and work will not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed our report. You will be obligated to compensate us for all the time expended at our prevailing hourly rates and to reimburse us for all out of pocket expenditures related to this engagement. 6 Arkin & Associates, P.C. Engagement Terms & Conditions December 8, 2015

7 Generally speaking, unless other arrangements have been made, we do not bill on an hourly basis. Our fees will be at our prevailing rates for the engagement as determined based on the complexity of your engagement. We are happy to provide an estimate of the fee charged prior to the service being rendered. Mediation & Arbitration If any dispute, controversy or claim arises in connection with the performance or breach of this agreement, either party may, upon written notice to the other party, request that the matter be mediated. Such mediation will be conducted by a mediator appointed by and pursuant to the Rules of the American Arbitration Association or such other neutral facilitator acceptable to both parties. Both parties will exert their best efforts to discuss with each other in good faith their respective positions in an attempt to finally resolve such dispute or controversy. Each party may disclose any facts to the other party or to the mediator which it, in good faith, considers necessary to resolve the matter. All such discussions, however, will be for the purpose of assisting in settlement efforts and will not be admissible in any subsequent litigation against the disclosing party. Except as agreed by both parties, the mediator will keep confidential all information disclosed during negotiations. The mediator may not act as a witness for either party in any subsequent arbitration between the parties. The mediation proceedings will conclude within sixty days from receipt of the written notice unless extended or terminated sooner by mutual consent. Each party will be responsible for its own expenses. The fees and expenses of the mediator, if any, will be borne equally by the parties. If any dispute, controversy, or claim arising out of or in connection with the performance or breach of this agreement cannot be resolved by mediation, then the dispute, controversy or claim will be settled by arbitration in accordance with the Rules of the American Arbitration Association (AAA) for the Resolution of Accounting Firm Disputes. No prehearing discovery will be permitted unless specifically authorized by the arbitration panel. The arbitration hearings will take place in Savannah, Georgia. * One arbitrator shall be selected using AAA procedures. * The arbitrator shall use all reasonable efforts to minimize discovery and to complete the arbitration proceedings as expeditiously as possible. * The arbitrator shall render a written decision within thirty (30) calendar days of the hearing. * The arbitrator will not award attorney's fees, or punitive, incidental, consequential, treble or other multiple or exemplary damages, and the parties hereby agree to waive and not seek such damages. * The arbitration shall be held in Savannah, Georgia; both parties hereby give their irrevocable consent to jurisdiction of courts of or in the State of Georgia. IN AGREEING TO ARBITRATION, WE BOTH ACKNOWLEDGE THAT IN THE EVENT OF A DISPUTE, EACH OF US IS GIVING UP THE RIGHT TO HAVE THE DISPUTE DECIDED IN A COURT OF LAW BEFORE A JUDGE OR JURY, AND INSTEAD WE ARE ACCEPTING THE USE OF ARBITRATION FOR RESOLUTION. All invoices are due and payable upon presentation. 7 Arkin & Associates, P.C. Engagement Terms & Conditions December 8, 2015