TERMS OF ENGAGEMENT

Purpose

The terms of engagement as set out below confirms our understanding of the engagement and the nature of services and limitations of services provided.  

Our Services

This firm will provide services (the services) as set out in this Engagement Agreement (this agreement). The services will be conducted in accordance with the relevant professional and ethical standards issued by the Accounting Professional & Ethical Standards Board Limited. The extent of our procedures and services will be limited exclusively for this purpose. As a result, no audit or review will be performed, accordingly, no assurance will be expressed. Our engagement cannot be relied upon to disclose irregularities including fraud, other illegal acts and errors that may exist. However, we will inform you of any such matters that come to our attention. 

If, as part of our engagement, we are requested to provide any report or review for distribution, there is no assumption of responsibility for any reliance on our report by any person or entity other than yourself and those parties indicated in the report or review. The report or review shall not be inferred or used for any purpose other than for which it was specifically prepared. Accordingly, our report may include a disclaimer to this effect. In the course of our engagement any advice given to you is only an opinion based on the knowledge of the particular circumstances and your instructions. 

Our services may include: 

Compilation 

1. Preparation of financial reports based on information provided by you and in accordance significant accounting policies as set out in the notes to the accounts and in accordance with APES315 -Compilation of Financial Information.   

2. We will provide taxation services to you and your group on the basis that you have appointed us Tax Agent for dealings with the ATO. 

Taxation services in compliance with APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code), APES 220 Taxation Services and the Code of Professional Conduct pursuant to Tax Agent Services Act 2009, and as governed by The Tax Practitioners Board which may include services as follows:   

  • Preparing returns, notices, statements, applications or other documents about your liabilities, obligations, or entitlements under a taxation law  

  • Lodging returns, notices, statements, applications or other documents about liabilities, obligations, or entitlements under a taxation law.  

  • Providing advice about taxation law that can be reasonably expected to be relied upon to satisfy taxation obligations.  

  • Providing tax-related advice specific to your circumstances regarding: PAYG withholding liability, Superannuation Guarantee obligations, fringe benefits tax.  

  • Preparing depreciation schedules on the deductibility of capital expenditure.  

  • Advising about claiming of an allowable tax deduction for superannuation contribution under the Income Tax Assessment Act 1997 (ITAA 1997).  

  • Advising about superannuation contribution caps (such as the transfer balance cap) and the effect of exceeding those caps.  

  • Advising about fringe benefits tax laws  

  • Undertaking a payroll compliance review, providing an assessment and/or opinion as to whether you are compliant with their obligations under one or more taxation laws.  

  • Dealing with the Australian Taxation Office (ATO) on behalf of you under a taxation law.  

  • Providing a payroll service which involves interpreting and applying taxation law, including reporting of employee payroll information through the use of or set up of single touch payroll (STP) enabled software.  

  • Advising on the tax implications of salary sacrificing arrangements and salary packaging.  

  • Undertaking a payroll compliance review, providing an assessment and/or opinion whether the client is compliant with one or more BAS provisions  

  • Providing a payroll service which involves interpreting and applying a BAS provision, including reporting of employee payroll information through the use of or set up of STP enabled software  

  • Applying to the Commissioner or the Administrative Appeals Tribunal (AAT) for a review of, or instituting an appeal against, a decision on an objection under Part IVC of the Taxation Administration Act 1953 (TAA) and lodging objections.  

Corporate services

Where applicable, provide services to assist you with your company and related statutory requirements including ASIC obligations.  

BAS  

  • Ascertaining liabilities, obligations or entitlements of an entity that arise or could arise, under a BAS provision  

  • Dealing with the Australian Taxation Office (ATO) on behalf of you in relation to a BAS provision  

  • Advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise, or could arise, under a BAS provision   

  • Completing activity statements on behalf of you or instructing which figures to include.   

  • Coding transactions, tax invoices and transferring data onto a computer program for you through processes that require the interpretation or application of a BAS provision.  

  • Advising a client on fuel tax credits  

Period of Engagement

Unless otherwise advised, the terms of our engagement will remain in place for the current year and future years.   

Our Responsibilities

We will provide our services within a reasonable time period taking into account deadlines and overall quantum of work required. 

We will perform procedures (guided by the APES suite of standards) required that are directly related to the engagement consistent with our Fundamental Principles of integrity, objectivity, professional competence and due care, confidentiality, professional behaviour, and identifying, avoiding, and dealing with conflicts of interests. 

We will seek to understand your requirements and provide you services confidentially and professionally.   

We will document sufficient and appropriate records of the procedures performed for the TE, which may be subject to CPA Australia Best Practice Program assessment under APES 320 Quality Control for Firms. 

We are obliged to consider whether our clients create any threats to our compliance with our Fundamental Principles and where we cannot reduce the risk to an acceptable level we are obliged to decline or cease the client engagement. 

We have a duty to act in your best interests, unless this duty is inconsistent with our duty to act in the public interest. 

We are responsible for maintaining records for a period of at least 5 years unless otherwise required by legislation. 

During the course of our engagement, if we identify or suspect that Non-Compliance with Laws or Regulations (NOCLAR) has occurred or may occur, which may have a direct effect on material amounts or disclosures in the financial statements or compliance and may be fundamental to Client name's ability to continue its business or to avoid material penalty, we may: 

  • Discuss the matter with the appropriate level of management, those charged with governance or the internal auditor, as appropriate 

  • Communicate the non-compliance or suspected non-compliance with Client name's external auditor, unless prohibited by law or regulation 

  • Disclose the matter to an appropriate authority even when there is no legal or regulatory requirement to do so; and/or 

  • Withdraw from the engagement and the professional relationship where permitted by law or regulation

Where appropriate we will inform you of our intention to disclose the matter to an appropriate authority before disclosing the matter. However, if we have reason to believe that the actual or intended conduct would constitute an imminent breach of a law or regulation that would cause substantial harm to the general public, we may immediately disclose the matter to an appropriate authority in order to prevent or mitigate the consequences of such imminent breach of law or regulation.

Your Responsibilities

You agree to pay the services in accordance with this agreement.   

The engagement will be conducted on the basis that you acknowledge and understand the nature of the engagement. 

We will also rely on you to:  

  • Ensure that all information supplied is accurate, complete, and not misleading;  

  • Promptly notify us of any material changes to the business that may affect the forecasts;  

  • Make appropriately authorised personnel available to respond to reasonable queries from the us. McMillans will rely on information provided by you without independent verification unless expressly agreed otherwise. McMillans accepts no liability for errors or omissions arising from inaccurate or incomplete information provided by you.  

  • You need to be aware that under the Australian Taxation Office's self-assessment and substantiation rules, you are required to maintain and provide full and proper records in order to facilitate the preparation of accurate returns. You must retain records in relation to transactions relevant to the calculation of your taxable income.  These records must be retained by you for a period of five years after the lodging of your return. It is therefore our assumption that all necessary receipts, invoices and related documentation are held by you.   

  • Whilst the Commissioner of Taxation will accept claims made by a taxpayer in an income tax return and issue a notice of assessment, usually without adjustment, the return may be subject to later review. Under the taxation law such a review may take place within a period of up to four (4) years after tax becomes due and payable under the assessment. Furthermore, where there is fraud or evasion there is no time limit on amending the assessment. Accordingly, you should check the return before it is signed to ensure that the information in the return is accurate. Where the application of a taxation law to your particular circumstances is uncertain you also have the right to request a private ruling, which will set out the Commissioner's opinion about the way a taxation law applies, or would apply, to you in those circumstances. The fee detailed in this agreement does not include any fee and charge for us to seek and obtain a private ruling on your behalf.  

  • For GST purposes it is also our assumption that the relevant tax invoices and necessary documentation are held for expenditure in respect of which an input tax credit has been claimed.  

Your Rights Under Taxation Law

You have certain rights under the Australian taxation laws, including the right to seek a private ruling from the Australian Taxation Office or to appeal or object against a decision made by the Commissioner. We will advise you of your rights under the taxation laws and the appropriate application of your rights as and when required.  

Ownership of Documents

In the course of our engagement we will prepare various working papers consistent with the firm internal quality control process, and to allow us to complete and provide the services to you. These documents will remain the property of our firm and will be retained to support any future queries on work completed. All original documents obtained from you will be returned to you (subject or our right of lien) and will remain your property. Where appropriate we will take copies of the original documents for our records. As part of our engagement we may hold on your behalf company secretarial records, including company registers, resolutions, and records, including constitutions and deeds. We advise that documents and records may be filed electronically and provided to you in an electronic format as and when required  

In the event that you do not pay the fee for the services rendered, we expressly reserve the right to retain a right of lien over all documents in our possession and control relevant to the services rendered until such time as our fee is paid. You agree by accepting this agreement and the terms contained therein that we have a right of lien.  

Confidentiality

McMillans acknowledges that information provided by  you in connection with this engagement is confidential and commercially sensitive. We agree to:  

  • Hold all Confidential Information in strict confidence and not disclose it to any third party without the prior written consent of you, except as required by law or applicable professional standards;  

  • Use Confidential Information solely for the purpose of performing the services described in this engagement letter;  

  • Take reasonable steps to protect Confidential Information from unauthorised access, loss, or misuse, including through appropriate physical and electronic security measures;  

  • Ensure that any staff or contractors engaged to assist with this matter are subject to equivalent confidentiality obligations  

  • The obligations in this section do not apply to information that is or becomes publicly available through no fault of the McMillans, or that McMillans is required to disclose by law, court order, or regulatory authority (in which case we will, where permissible, provide you with prior notice).  

Data Security

  1. McMillans uses secure, encrypted systems for the storage and transmission of client data.  

  2. Client records and internal administration data are stored on external (cloud based) servers located within Australia. This data is encrypted which restricts 3rd party access.  

  3. McMillans uses a dedicated IT provider who maintains and designs server architecture, provide security advice, encryption settings, administration of program loading and system protection (back up and retrieval of data).  

  4.  In providing our services we may utilise cloud-based computing providers. We rely on their security measures.   

  5. The firm may access your data/accounting records from cloud-based software. As part of this engagement, you authorise our firm to engage such services as and when required.  

Privacy

Please refer to our Privacy Policy.

Fees & Terms

Our services will be provided on fee-for-service basis. Refer to the details provided in our Letter of Engagement where applicable.  

Our fees are determined by hourly charge out rates and will be invoiced to you on the basis of the time required by the individuals assigned to your matter plus any direct expenses.   

Our time and fee estimates are given in good faith and on the basis that we will receive timely information and assistance from you as required.   

At times we may incur disbursements on your behalf in relation to the engagement of third parties such as auditors or actuaries, ASIC fees, search fees and other such matters. Any disbursements will be on charged to you at face value.   

The fee, or fee estimate, will be subject to change and in the event we propose to change the fee, or fee estimate, we shall advise you in writing prior to us commencing the works as detailed in this agreement. To secure payment of the fees due and payable to us under this agreement, you agree by execution of this Engagement to charge any real property owned by you (currently or in the future) in our favour and you consent to a Caveat being lodged by us on the titles of any real property owned by you (currently or in the future).  

Our terms of payment are strictly 30 days from date of invoice unless otherwise advised.

We may suspend our services or cease to act for you by written notice if payment of any fees is unduly delayed. 

If you default on your obligation to pay us within the payment terms or agreed extended terms overdue invoices may be referred to a debt collection agency. 

If you decide to leave McMillans and appoint another accountant, we will immediately review the work in progress and consider and issue a final invoice.  We would also consider whether any credit is required for time billed and paid for and work not completed. 

Directors/Trustee's Indemnity  

In the event that the entity invoiced by us for our services is unable to discharge its liabilities to us then the entity's Directors or Trustees agree to personally indemnify us for any such liability. 

Professional Indemnity Insurance

We hold professional indemnity insurance of at least the minimum amount prescribed in the CPA Australia Ltd By-Laws or as required by law.

Professional Standards Scheme & Limitation of Liability   

We participate in the CPA Australia Ltd Professional Standards Scheme (Scheme), which facilitates the improvement of professional standards to protect consumers and may limit our liability to you in a cause of action.

The Scheme applies to professional accounting services including accounting, bookkeeping, taxation, auditing and assurance, insolvency and corporate reconstruction, management accounting, management consulting, forensic accounting, and valuation services.

Engagement of Third Parties

Our firm may from time to time engage the services of third parties including auditors, actuaries and consultants which may include access to your records/data from our secure servers. As part of this engagement, you authorise our firm to engage such services as and when required. We shall advise you in writing prior to us engaging any third party and provide you with an estimate of fee or charge that shall be incurred by you and seek your approval for same. We may disclose personal information about you to third parties by express consent or as required by law.   

We have an agreement with Frontline Accounting to provide dedicated employees to McMillans. We engage with these employees on a full-time or part-time basis via Frontline. These employees are based in Manila.

Disclosures

Please refer to our Disclosure Statement.

Professional Standards

McMillans is a member of CPA Australia and conducts its practice in accordance with applicable professional and ethical standards, including those issued by the Accounting Professional and Ethical Standards Board (APESB). This engagement is governed by APES 305 Terms of Engagement and other relevant standards where applicable.  

Software Providers

The firm may access your data/accounting records from cloud-based software. As part of this engagement, you authorise our firm to engage such services as and when required.  

Hosted Data

Client records and internal administration data are stored on external (cloud based) servers located within Australia. This data is encrypted which restricts 3rd party access.  

McMillans use a dedicated IT provider who maintains and designs server architecture, provide security advice, encryption settings, administration of program loading and system protection (back up and retrieval of data).  

In providing our services we may utilise cloud-based computing providers. We rely on their security measures.   

As part of this engagement, you authorise our firm to engage such services as and when required.  

The data is largely stored within Australia however there may be circumstances when data is stored overseas.  We utilise hosted software providers including: 

  • Xero Practice Manager (Practice Management Software) - Australia & USA

  • Xero (Accounting Software) - Australia & USA 

  • BGL (Corporate Services Software) - Australia 

  • Ignition (Engagement Software) - USA 

  • FuseSign (Electronic Signature Software) - Australia

  • Smartdocs - Access Group (ATO Document Management Software) - Australia & USA 

  • Microsoft (OneDrive & SharePoint) - USA 

As part of this engagement and accepting our services you acknowledge and agree that your personal information may be stored with hosted providers.

Authority to Lodge Information on Your Behalf

At times our engagement will require us to lodge information on your behalf to statutory bodies including the Australian Taxation Office, ASIC and other government authorities. This may include Business Activity Statements and other such reporting requirements.  As part of this engagement, you authorise our firm to lodge this relevant information on your behalf.