The compliance landscape is constantly changing. Reviewing those changes and understanding how they affect your engagement letters is a huge task. As an OverSuite subscriber, we do that for you formally on a quarterly basis and ad-hoc as changes arise.
What did we review?
- Changes to the professional body regulations to understand their impact on the terms and conditions in your Engagement Letters;
- The scopes of each policy to ensure no changes to legislation that impact these.
What has changed?
No Required Legislative Changes
There have been no changes to the professional body regulations or legislation that require an update to your letters so this quarter there’s nothing we need you to do.
Nevertheless, due to an increasing emphasis on the importance of your client providing you with true and accurate information, we have extended specific clauses across the scopes and terms and conditions.
All of these updates serve as added protection but do not require an immediate re-issue of your engagement letters.
We have also extended the scope of the audit letters to cover groups and subsidiaries as this has been a popular request that we feel is important so that you can issue engagement letters with every client.
Here’s a full breakdown..
Service Schedules
1. The payroll service schedules have been extended to clarify respective responsibilities and put hones on the provision of true and accurate information.
The following paragraphs have have updated..
Your Responsibilities [changes]
To enable me/us to carry out work, you agree:
[I/we] will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
To notify at least 5 working days or such other period as agreed prior to the payroll pay date of all transactions or events that may need to be reflected in the payroll for the period, including details of:
Information necessary to enable me/us to calculate statutory payments, ie, statutory sick pay, statutory maternity pay, statutory adoption pay, statutory paternity pay, statutory shared parental pay, statutory parental bereavement pay;
My/Our Responsibilities [changes]
[I/We] will deal with any online secure messages sent to [me/us] by HMRC in respect of your payroll, for example, code number notifications, student loan repayment notices, and generic notification notices. Anything that you receive in your PAYE online account should be forwarded to me/us for action.
Audits
1. Audit letters now cover those that audit groups or subsidaries
1. The audit scopes for Limited Companies, Partnerships, Limited Liability Partnerships, and Community Interest Companies have been updated to cover those that audit groups or subsidaries.
The following paragraph has been extended to reflect..
Changes in the Law, Practice or in Public Policy [changes]
[My/Our] responsibility to you [changes]
If the company is a subsidiary, we are required by ISA (UK) 600 to cooperate with the group auditor, providing them with information, explanations and, where necessary, copies of our working papers to allow them to form an opinion on the group financial statements as a whole. You agree that we may communicate with the group auditors and respond to any reasonable requests without any further consent from you.
If we are required to report on consolidated financial statements, we are required by ISA (UK) 600 to obtain sufficient appropriate audit evidence to express an opinion on the consolidated financial statements. We will be responsible for the direction, supervision and performance of the group audit. You agree that we may communicate with the component auditors where required without any further consent from you
2. The audit scopes have also been updated to further clarify the scope of the work and respective responsibilities.
As these changes are extensive, please get in touch with a member of the team if you would like to discuss the highlighted paragraphs.
Trusts
1. The Trusts scope has been extended to further clarify respective responsibilities.
In the Trusts scope, there are new paragraphs within the Changes in the Law, Practice or in Public Policy section:
Changes in the Law, Practice or in Public Policy [changes]
[I/We] will not accept responsibility if you act on advice given by me/us on an earlier occasion without first confirming with me/us that the advice is still valid in the light of any change in the law, practice, public policy or in your circumstances.
and
[I/We] will accept no liability for losses arising from changes in the law (or the interpretation thereof), practice or public policy that are first published after the date on which the advice is given
Limited Company
The Limited Company (Non-Audit) scope has been extended to clarify your clients responsibility in giving true and accurate information.
Statutory Responsibilities [changes]
As directors you must not approve the financial statements unless you are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss of the company.
Limited Liability Partnerships
1. The Limited Liability Partnership (Non-Audit) scope has been extended to clarify and reinforce your clients responsibilities.
In the Limited Liability Partnership (Non-Audit) scope, there are two additional paragraphs within the Statutory Responsibilities Section:
Statutory Responsibilities [changes]
As members you must not approve the financial statements unless you are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss of the limited liability partnership
and
You are responsible for ensuring that the LLP complies with the laws and regulations that apply to its activities, and for preventing non-compliance and detecting any that occur.
Community Interest Companies
1. The Community Interest Company (Non-Audit) scope has been extended to clarify your clients responsibility in giving true and accurate information.
In the Community Interest Company (Non-Audit) Scope, there is an additional paragraph within the Statutory Responsibilities Section:
Statutory Responsibilities [changes]
As directors you must not approve the financial statements unless you are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss of the company.
Charities
1. The charity scopes, Charity Accounts and Charity Independent Examination, have been updated to clarify and reinforce your clients responsibilities with regards to honesty and the provision of information.
In the Charity Accounts and Charity Independent Examination scopes, there is an additional paragraph beneath Statutory Responsibilities, Your Responsibilities:
Statutory Responsibilities, Your Responsibilities [changes]
As trustees you must not approve the financial statements unless you are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss of the charity.
2. The Charity Audit scope has been updated to clarify respective responsibilities.
Statutory Responsibilities, Your Responsibilities [changes]
[I/We] will inform you on a timely basis of all significant facts and matters that may bear upon my/our integrity, objectivity and independence.
and
If [I/we] cease to act as statutory auditors for the company, I/we are required by paragraph 9(3) of schedule 1 of statutory instrument 2016/649 Statutory Auditors and Third Country Auditors Regulations 2016 to make available, if requested, all relevant information concerning the most recent audit of the company to my/our successors as statutory auditors. You agree to cover any reasonable costs that I/we may incur in fulfilling my/our statutory duty in making such information available.
Terms & Conditions
1. The terms and conditions have been updated to clarify and reinforce your clients responsibilities with regards to honesty and the provision of information.
Delivery of Our Services [changes]
When dealing with HMRC on your behalf I/we are required to be honest and to take reasonable care to ensure that your returns are correct. To enable me/us to do this, you are required to be honest with me/us and to provide us with all necessary information in a timely manner. For more information about ‘Your Charter’ for your dealings with HMRC, visit https://www.gov.uk/government/publications/hmrc-charter. To the best of our abilities, we will ensure that HMRC meet their side of the Charter in their dealings with you.
2. Data protection clauses have been updated to incorporate the latest version of the data protection act for UK businesses.
Delivery of Our Services [changes]
[I/We] will comply with the General Data Protection Regulations and the Data Protection Act 2018 as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2020 which merge the previous requirements of the Data Protection Act with the requirements of the General Data Protection Regulation ((EU) 2016/679) when dealing with your personal data.
“For over 30 years Valerie Steward has worked with accountancy practices, helping them to develop their businesses and remain compliant. She has authored and co-authored a number of technical guides, work programmes on audit and anti-money laundering and practical aids such as engagement letters as well as publications on practice management and the not for profit sector.”
Valerie StewardAt The Forefront Of Compliance For Over 30 Years
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