FIRM NAME

Certified Public Accountants

DATE
COMPANY NAME
COMPANY ADDRESS 1
COMPANY ADDRESS 2
COMPANY CITY STATE ZIP
Dear CONTACT PERSON:
This will confirm our understanding of the arrangements for our audit of the financial statements
of COMPANY NAME, for the year ending FS DATE.
We will audit the Company's balance sheet as of FSDATE, and the related statements of income,
retained earnings, and especially cash flows for the year then ended, for the purpose of
expressing an opinion on them. The financial statements are the responsibility of the Company
management. Our responsibility is to express an opinion on the financial statements based on
our audit.
We will conduct our audit in accordance with Philippine Standards on Auditing. 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 of 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 auditors
judgment, including assessment of the risks of material misstatement of the financial statements,
whether due to fraud and 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 over-all 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 PSAs.
In making our risk assessments, we consider internal control relevant to the entitys 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
entitys internal controls. 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.

Management Responsibilities
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with PFRS, and 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.
The PSA requires us to obtain written representations from management that it recognizes
its responsibility for the fair presentation of the financial statements in accordance with
PFRS and has approved the financial statements. Such standards also require that we
obtain written representations on matters material to the financial statements when other
sufficient, appropriate audit evidence cannot reasonably be expected to exist.
Managements representations also include affirmations that the effects of any uncorrected
misstatements are, both individually and in the aggregate, immaterial to the financial
statements taken as a whole; the completeness of all minutes of the meetings of the board
of directors and important committees; the availability and completeness of financial
records and related data; all known and actual or possible non-compliance with laws and
regulations, whose effects should be considered when preparing financial statements; and,
to the best of their knowledge and belief, the absence of irregularities involving
management or those employees, who have significant roles in the control structure.
The results of our tests based on accounting records presented to us for our audit, the
responses to our inquiries and the written representations to us constitute the evidential
matter we intend to rely upon in forming an opinion on the financial statements. Because
of the importance of managements representations to an effective audit, the Company
hereby releases and will indemnify, defend and hold harmless the Firm and its personnel
from any claims, liabilities, costs and expenses resulting from misrepresentations by the
management.
Management is responsible for the prevention and detection of fraud and error through the
implementation and continued operation of adequate accounting and internal control
systems. Management is also responsible for ensuring that the Companys operations are
conducted in accordance with laws and regulations. The responsibility for the prevention
and detection of non-compliance rests with management.
Management is responsible for the Supplemental Information required under RR 15-2010,
Amending Certain Provisions of Revenue Regulations No. 21-2002, as Amended,
Implementing Section 6 (H) of the Tax Code of 1997, Authorizing the Commissioner
of Internal Revenue to Prescribe Additional Procedural and/or Documentary
Requirements in Connection with the Preparation and Submission of Financial
Statements accompanying Income Tax Returns.
If you intend to publish or otherwise reproduce the financial statements and make reference to
our firm, you agree to provide us with printers' proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the final reproduced material for our
approval before it is distributed.

FEES
Our fees will be billed as work progresses and are based on the amount of time required plus outof-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 $XX,XXX to $XX,XXX.
The working papers for this engagement are the property of NAME OF AUDITOR and
constitute confidential information. However, we may be requested to make certain working
papers available to NAME OF REGULATOR pursuant to authority given to it by law or
regulation. If requested, access to such working papers will be provided under the supervision of
NAME OF AUDITOR personnel. Furthermore, upon request, we may provide photocopies of
selected working papers to NAME OF REGULATOR. The NAME OF REGULATOR may
intend, or decide, to distribute the photocopies or information contained therein to others,
including governmental agencies.
If this letter correctly expresses your understanding, please sign the enclosed copy where
indicated and return it to us.
We appreciate the opportunity to serve you and trust that our association will be a long and
pleasant one.
Sincerely,
FIRM NAME
______________________________
[Engagement Partner's Signature]
Accepted and agreed to:
______________________________
[Client Representative's Signature]
______________________________
[Title]
______________________________
[Date]