1. AUDIT ENGAGEMENT LETTER
To: Mr Sheridan
Managing Director
Sheridan Audio Visual Ltd
Dear Mr Sheridan,
You have requested that we audit the financial statements of Sheridan Audio Visual Ltd, which
comprise the balance sheet as at March 31, 2020-2021, and the income statement, statement of
changes in equity and cash flow statement for the year then ended, and a summary of significant
accounting policies and other explanatory information. We are pleased to confirm our acceptance
and our understanding of this audit engagement by means of this letter. Our audit will be
conducted with the objective of our expressing an opinion on the financial statements.
We will conduct our audit in accordance with International Standards on Auditing (ISAs). Those
standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material
misstatement. An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, there is an unavoidable risk that some material misstatements may not be detected, even
though the audit is properly planned and performed in accordance with ISAs.
In making our risk assessments, we consider internal control relevant to the entity’s preparation
of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. However, we will communicate to you in writing concerning any
significant deficiencies in internal control relevant to the audit of the financial statements that we
have identified during the audit.
Our audit will be conducted on the basis that [management] and, where appropriate, those
charged with governance acknowledge and understand that they have responsibility:
(a) For the preparation and fair presentation of the financial statements in accordance with
International Financial Reporting Standards;
(b) For such internal control as [management] determines is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error;
and
2. (c) To provide us with:
(i) Access to all information of which [management] is aware that is relevant to the
preparation of the financial statements such as records, documentation and other matters;
(ii) Additional information that we may request from [management] for the purpose of
the audit; and
(iii) Unrestricted access to persons within the entity from whom we determine it
necessary to obtain audit evidence. As part of our audit process, we will request from
[management and, where appropriate, those charged with governance], written
confirmation concerning representations made to us in connection with the audit. We
look forward to full cooperation from your staff during our audit
Further, we will be available during the year to consult with you on the tax effects of any
proposed transactions or contemplated changes in business policies.
Assistance to be supplied by your personnel, including the preparation of schedules and analyses
of accounts, is described in a separate attachment. Timely completion of this work will facilitate
the completion of our audit.
Our fees will be billed as work progresses and are based on the amount of time required plus out
of-pocket expenses. Invoices are payable upon presentation. We will notify you immediately of
any circumstances we encounter that could significantly affect our initial estimate of total fees,
which will range from $70,000 to $90,000.
The working papers for this engagement are the property of Sheridan Audio Visual Ltd and
constitute confidential information and will be retained by us in accordance with our policies and
procedures.
If any dispute arises (between/among) the parties hereto, the parties agree first to try in good
faith to settle the dispute through non-binding mediation. The costs of mediation shall be shared
equally by the parties.
The parties agree that, if any dispute cannot be settled through mediation, the dispute may then
be brought before a court of competent jurisdiction, but the matter will ultimately be decided by
the court, sitting without a jury. The parties recognize they have knowingly and voluntarily
agreed to waive all rights to have any such dispute determined by a jury, but otherwise retain all
rights afforded under the applicable civil justice system.
This Agreement, and the rights and obligations of the Parties hereunder, shall be governed by
and construed in accordance with the laws (enter state or other jurisdiction) (without giving
effect to its provisions on conflict of laws).
This Agreement is fully and voluntarily entered into by the Parties. Each Party states that he,
she, or it has read this Agreement, has obtained advice of counsel if he, she, or it so desired,
understands all of this Agreement, and executes this Agreement voluntarily and of his, her, or its
own free will and accord with full knowledge of the legal significance and consequences of this
Agreement.
3. The form and content of our report may need to be amended in the light of our audit findings.
Please sign and return the attached copy of this letter to indicate your acknowledgement of, and
agreement with, the arrangements for our audit of the financial statements including our
respective responsibilities.
Alex Gold Financial Services
Acknowledged and agreed on behalf of Sheridan Audio Visual Ltd by
(signed)
......................
Name and Title
Date