SoS (501) Micro Entity Accounts (FRS105)

SCHEDULE OF SERVICES (501) ACCOUNTS PREPARATION FOR A MICRO ENTITY (FRS105)

This schedule should be read alongside your letter of engagement (LoE) and the (300) Standard Terms & Conditions.

Recurring Compliance Work

You have engaged us to prepare your annual accounts for your approval, based on your accounting records and the information and explanations you provide to us. We will prepare the accounts in accordance with FRS105 and the Small Companies (Micro-Entities’ Accounts) Regulations 2013.

Micro entity accounts have simplified disclosure requirements compared to accounts prepared under FRS102. In practice this means the accounts will not include a cash flow statement, will not reflect any revaluation of assets, will not include deferred tax, and will not apply fair value accounting. By engaging us on this basis, you confirm that you understand and accept these restrictions.

No Audit

We will not carry out any audit work as part of this engagement. Accordingly, we will not verify the assets and liabilities of the company, or the items of income and expenditure. Carrying out an audit would require additional procedures under International Standards on Auditing to enable us to report on the truth and fairness of the financial statements. We are also unable to undertake to discover any shortcomings in your systems or irregularities on the part of your employees.

If an audit of your accounts becomes required, please notify us in writing. If our work indicates that the company may no longer qualify for audit exemption, we will inform you. Any audit engagement would require a separate letter of engagement.

To ensure that anyone reading the accounts is aware that no audit has been carried out, we will attach an Accountants’ Report to the accounts confirming this. The report is addressed to the directors.

Ad Hoc and Advisory Work

Where a query requires work or time spent outside the scope of your recurring compliance, we will let you know and agree a fee with you before proceeding where practicable. Where prior agreement is not practicable, we reserve the right to charge for the work or time involved and will notify you as soon as reasonably possible.

Ad hoc queries by, for example, telephone or email are not part of routine compliance and may result in additional fees. Where possible, we will discuss and agree any additional fees in advance, but this is not always practicable and we reserve the right to charge for such work.

Your Responsibilities

As directors of the company, you are required by statute to prepare accounts for each financial year that give a true and fair view of the state of affairs of the company and of its profit or loss for that period. You must not approve the accounts unless you are satisfied that they give a true and fair view of the company’s assets, liabilities, financial position and profit or loss.

In preparing those accounts, you must:

Select suitable accounting policies and apply them consistently.
Make judgements and estimates that are reasonable and prudent.
Prepare the accounts on the going concern basis, unless it is not appropriate to do so.

You are responsible for confirming that the company meets the qualifying conditions as a micro entity under the Small Companies (Micro-Entities’ Accounts) Regulations. If, in the course of our work, we identify information that suggests the company may no longer meet those conditions, we will bring this to your attention.

You are responsible for determining whether the company qualifies for audit exemption under section 477 of the Companies Act 2006 and whether any of the grounds for exclusion under section 478 apply.

You are responsible for keeping proper accounting records that disclose with reasonable accuracy the financial position of the company at any time. You are also responsible for safeguarding the company’s assets and for taking reasonable steps to prevent and detect fraud and other irregularities.

You are responsible for making available to us, as and when required, all the company’s accounting records and all other relevant records and related information, including minutes of management and shareholders’ meetings.

To enable us to carry out our work, you agree to provide us with:

Records of all cash receipts and payments.
Records of invoices issued and received.
Bank statements, reconciled to your records on at least an annual basis.
Details at the year-end of: stocks and work in progress; fixed assets; amounts owing to suppliers; amounts owing by customers; and accruals and prepayments.

If your turnover approaches the VAT registration threshold, you must notify us promptly so that we can advise you on your obligations and registration requirements.

You will keep us informed of material changes in your circumstances that could affect the accounts. If you are unsure whether a change is material, please let us know.

You are responsible for informing us promptly of any material event occurring after the balance sheet date that may affect the accounts, up to the date our report is signed. Once we have issued our report, we have no further direct responsibility in relation to the accounts for that financial year.

As part of our normal procedures, we may ask you to provide written confirmation of any oral information and explanations given to us during the course of our work.

Filing and Submission

Your annual accounts are submitted to HMRC in iXBRL format as part of your corporation tax return. The preparation and submission of the corporation tax return, CT600 and iXBRL-tagged accounts is covered by SoS (606) Corporation Tax.

Your accounts are also filed at Companies House in the simplified micro entity format.

The Confirmation Statement (form CS01) is included in our standard annual compliance work for incorporated company clients. As part of that process, we will review and confirm the accuracy of your register of persons with significant control (PSC register). Unless we have agreed otherwise in writing, we will prepare and submit your Confirmation Statement as part of the engagement.

You are responsible as directors for maintaining the PSC register throughout the year in accordance with the Companies Act 2006. Any changes to the register arising between annual filings — for example, a change in ownership or control — are your responsibility to notify us of promptly so that the register can be updated without delay.

Our Professional Approach

Our work will not be an audit of the accounts. Accordingly, we will not seek independent evidence to support entries in the accounting records, or to prove the existence, ownership or valuation of assets, or the completeness of income, liabilities or disclosures in the accounts. Nor will we assess the reasonableness of any estimates or judgements made in the preparation of the accounts. Our work will not provide assurance that the accounting records are free from material misstatement, irregularities or error.

We have a professional duty to prepare accounts that comply with generally accepted accounting principles. Micro entity accounts must comply with the Small Companies (Micro-Entities’ Accounts) Regulations 2013 and FRS105. Where we identify that the accounts do not conform to accepted accounting principles or the applicable standard, we will inform you and suggest amendments before the accounts are published. We have a professional responsibility not to allow our name to be associated with accounts that may be misleading. In extreme cases where this cannot be resolved, we will withdraw from the engagement and notify you in writing of the reasons.

Limitation of Liability

Our services are subject to the limitations on our liability set out in your letter of engagement (LoE) and in the (300) Standard Terms & Conditions. These are important provisions and you should read them carefully.

There are no third parties that we have agreed should be entitled to rely on the work done pursuant to this engagement.