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The document is an engagement letter from an auditing firm to a company board of directors that: 1) Confirms the auditing firm's acceptance to audit the company's balance sheet and related financial statements for the fiscal year. 2) Outlines that the audit will be conducted according to Philippine auditing standards to obtain reasonable assurance that the financial statements are free of material misstatements. 3) Notes that inherent limitations exist in any audit or accounting system and that the auditing firm will provide a separate letter on any material weaknesses in internal controls discovered.

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Novie Marie Balbin Anit
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274 views2 pages

PRO Forma

The document is an engagement letter from an auditing firm to a company board of directors that: 1) Confirms the auditing firm's acceptance to audit the company's balance sheet and related financial statements for the fiscal year. 2) Outlines that the audit will be conducted according to Philippine auditing standards to obtain reasonable assurance that the financial statements are free of material misstatements. 3) Notes that inherent limitations exist in any audit or accounting system and that the auditing firm will provide a separate letter on any material weaknesses in internal controls discovered.

Uploaded by

Novie Marie Balbin Anit
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PRO-FORMA AUDIT ENGAGEMENT LETTER

To the Board of Directors


Company name
Address
You have requested that we audit the balance sheet of (name of company) as of (fiscal year end), and the
related statements of income, cash flows and changes in stockholders equity for the year then ending.
We are pleased to confirm our acceptance and our understanding of this engagement by means of this
letter. Our audit will be made with the objective of our expressing an opinion on the financial statements.
We will conduct our audit in accordance with Philippine Standards on Auditing. Those Standards require
that we plan and perform the audit and to obtain reasonable assurance that the financial statements are
free of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statements presentation.
Because of the test nature and other inherent limitations of an audit, together with the inherent limitations
of any accounting internal control system, there is an unavoidable risk that even some material
misstatements may remain undiscovered.
In addition to our report on the financial statements, we expect to provide you with a separate letter
concerning any material weaknesses in accounting and internal control systems which come to our
knowledge.
We remind you that the responsibility for the preparation of financial statements including adequate
disclosure is that of the management of the company. This includes the maintenance of adequate
accounting records and internal controls, the selection and application of accounting policies, and the
safeguarding of the assets of the company. As part of our audit process, we will request from
management written confirmation concerning representations made to us in connection with the audit.
However, as part of our responsibility as an accredited external auditor of the Securities and Exchange
Commission, we shall report to the Commission any of the following cases which may have been
discovered based on generally accepted auditing standards, if the company fails to disclose the same to
the Commission under its current reports:
1.

Any material findings involving fraud or error which will reduce the consolidated total assets of the
company by five percent (5%).

2.

Losses or potential losses the aggregate of which amounts to at least ten percent (10%) of the
consolidated total assets of the company;

3.

Any finding to the effect that the consolidated assets of the company, on a going concern basis
are no longer adequate to cover the total claims of creditors.

We look forward to full cooperation with your staff and we trust that they will make available to us
whatever records, documentation and other information are requested in connection with our audit. Our
fees, which will be billed as work progresses, are based on the time required by the individuals assigned
to the engagement plus out-of-pocket expenses. Individual hourly rates vary according to the degree of
responsibility involved and the experience and skill required.
This letter will be effective for ______ years unless it is terminated, amended or superseded.

Please sign and return the attached copy of this letter to indicate that it is in accordance with your
understanding of the arrangements for our audit of your financial statements.

Name of company
Acknowledged on behalf of the
company by:
Name/Title

______________________
(Signature/Date)

Name of Auditor/Auditing Firm:

_______________________
(Signature/Date)

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