Standard Terms of Engagement

This document details our Standard Terms of Engagement for providing professional services to clients required under the Accounting Professional and Ethical Standards Board APES 305 – Terms of Engagement.

Objectives and Scope of the Engagement

We will conduct our professional accounting and taxation services in accordance with the relevant professional and ethical standards issued by the Accounting Professional and Ethical Standards Board Limited (APESB).

Our services are limited for professional accounting and taxation services only, we will not perform any audit or review and accordingly, no assurance will be expressed.

The disclosure of irregularities including fraud or other illegal acts or errors that may exist cannot be relied upon by this engagement.

Any such matters that come to our attention in this regard will be communicated to you.

We make no assumption of responsibility for reliance on our final reports by any person or entity other than you and the parties indicated in the final reports.

The documents produced by us shall not be used for any purpose other than the purpose for which they were prepared and our final reports will include a disclaimer to this effect.

Any advice provided to you by our firm is only an opinion based on our firm’s knowledge of your particular circumstances.

Professional Services Relating To Taxation Services

Under the Accounting Professional and Ethical Standards Board APES 220 – Taxation Services a member in public practice shall provide a client with a statement in writing that:

• The responsibility for the accuracy and completeness of the particulars and information provided by the client rests with the client;
• Any advice given to the client is only an opinion based on the member’s knowledge of the client’s particular circumstances; and
• A taxpayer has obligations under self assessment to keep full and proper records in order to facilitate the preparation of accurate returns.

The Taxation Administration Act 1953 contains specific provisions that may provide you with “safe harbours” from administrative penalties for incorrect or late lodgement of returns if, amongst other things, you give us “all relevant taxation information” in a timely manner (the safe harbour provisions apply from 1 March 2010).

Accordingly, it is to your advantage that all relevant information is disclosed to us as any failure by you to provide this information may affect your ability to rely on the “safe harbour” provisions and will be taken into account in determining the extent to which we have discharged our obligations to you.

Your Responsibilities

You are responsible for the accuracy and comprehensiveness of the details and information you provide to us.

You have obligations under the Income Tax Assessment Act 1936 to keep full and proper records in order to facilitate the preparation of accurate returns.

You are responsible for providing us with your information in a timely manner to ensure we are able to complete your work by the due date.

Our Responsibilities

Information acquired by us in the course of this engagement is subject to strict confidentiality requirements and we will not disclose that information to other parties except as required or allowed by law, or with your written or verbal consent.

Limitation of Liability

We will provide our services with reasonable care and skill.

Our liability to you is limited to losses, damages, costs and expenses directly caused by our negligence or wilful default.

Our liability may also be limited by a scheme approved under Professional Standards Legislation.

Further information on schemes is available from the Professional Standards Councils’ website at www.psc.gov.au.

Involvement of Third Parties

We may involve third party contractors or outsourced service providers in providing various aspects of your accounting work.

These services may include:

• Accounting file preparation and/ or data entry into our accounting systems;
• Auditing of accounts (including self-managed superannuation funds);
• Financial planning and dealing with financial institutions;
• Home loan, business loan and personal loan services; and
• Investment and insurance services.
• Acceptance of the services in conjunction with this engagement document indicates your acceptance of the use of outsourced services as described above.

Where the outsourced service requires that the disclosure of personal information to an overseas recipient, a consequence of your consent is that we, your accountants, will be required to take reasonable steps to ensure that Australian Privacy Principles are complied with by the overseas recipients of the personal information.

Use of Cloud Computing Services

By agreeing to this engagement and accepting these services you acknowledge and agree that your personal information may be stored electronically overseas. We use:

• Apple iCloud (a cloud email, messages and calendar system);
• Daylite (a cloud collaboration system);
• DocuSign (a cloud electronic signature system);
• Dropbox (cloud document management system);
• Hubdoc (cloud document management systems);
• Microsoft 365 (a cloud collaboration system);
• Saasu (a cloud accounting system);
• Squarespace (a cloud web hosting system),
• Slack (a cloud collaboration system);
• Xero (a cloud accounting system);
• Xero Tax (a cloud tax return preparation system), and
• Zoom (a cloud collaboration system).

These cloud computing systems store files on remote servers operated by third parties, including the use of hosting providers in Canada, the United States of America and in Singapore.

There is the ability for you to act as the subscriber for Xero Business Edition subscriptions and to “invite” us into that subscription as an “invited user,” rather than having us act as the Subscriber to that subscription.

Xero has different user roles, and in particular the Subscriber to a Xero subscription has the ability to control access rights to a Xero subscription.

If we are the Subscriber for your Xero Business Edition, we will always give you full access to your Xero subscription, including if the business relationship between us terminates or if there is a dispute between us.

If you transfer your business to a new accountant, you will need to provide us with the name and email address of your chosen new Xero Subscriber for us to transfer your Xero subscription.

We are bound by the Xero Partner Code of Conduct. This Code contains dispute resolution procedures and how your access to the Xero subscription will be maintained in the event of a dispute (including relating to non-payment of our fees) between us and you.

Ownership of Documents

All original documents that we obtain from you to perform the services under this engagement remain your property.

However, you agree that we may make a reasonable number of copies of the original documents for our records and to provide the services to you.

We retain all copyright in any document prepared by us during the course of carrying out the engagement for you, except where the law specifically states otherwise.

To the extent permitted by law or professional standards, we reserve the right to exercise a lien over all documents and records in our possession relating to all engagements for you until all outstanding fees and disbursements are paid to us in full.

Confidentiality and Data Protection

Personal information collected by us in the course of our dealings with you will be handled in accordance with this engagement letter and our privacy policy available at proactivereach.com (Privacy Policy).

The purpose of collecting your personal information is to carry out the services and for related purposes such as staff training and education, updating and enhancing our client records, analysis for management purposes and statutory returns, legal and regulatory compliance and crime prevention.

We will use and disclose personal information as set out in our Privacy Policy. Information you provide to us will be kept strictly confidential.

Access to the information by our employees and contractors will be limited to the level of access required for them to complete the services.

Our files may be subject to review as part of the quality control review program of Chartered Accountants Australia and New Zealand which monitors its members’ compliance with professional standards.

By accepting our engagement you acknowledge that, if requested, our files relating to this engagement will be made available under this program. Should this occur, we will advise you.

Very occasionally, we may also be required to disclose confidential information by law, regulatory bodies, insurers or otherwise in accordance with APES 110 Code of Ethics for Professional Accountants.

Where you share personal information regarding a third party (including your directors and employees) with us, you confirm that you have complied your obligations under the Privacy Act 1998 (Cth) (including, if you are not bound by that Act, as if you were so bound), including that the personal information was lawfully collected, that you are entitled to disclose the personal information to us, and that we may use and disclose the personal information in the manner detailed above.

Your Disclosure and Record Keeping Obligations

You are required by law to keep full and accurate records relating to your tax affairs in order to facilitate the preparation of accurate tax returns.

The responsibility for the accuracy and completeness of the particulars and information provided to us by you rests with you.

Any advice given to you by us is only an opinion based on our knowledge of your circumstances.

It is your obligation to provide us with all information that you reasonably expect will be necessary to allow us to perform work specified under this engagement within a timely manner or as requested.

This includes providing accurate and complete responses to questions asked of you by us within 10 working days.

Inaccurate, incomplete or late information could have a material effect on our services and/or our conclusions and may result in additional fees.

You are also required to advise us on a timely basis if there are any changes to your circumstances that may be relevant to the performance of our services.

Specifically, if any subsequent event results in the information you provided to us being inaccurate, incomplete or misleading, then you are obliged to advise us as soon as possible.

We take no responsibility to the extent that our advice is inaccurate, incomplete or misleading because it is based on inaccurate, incomplete or misleading information being provided to us.

By accepting the terms in this Agreement, you will be taken to have agreed that the performance of our services is dependent on the performance of your obligations relating to disclosure and record keeping.

You are responsible for the reliability, accuracy and completeness of the accounting records and disclosure to us of all material and relevant information.

The Taxation Administration Act 1953 contains specific provisions that may provide you with “safe harbours” from administrative penalties for incorrect or late lodgement of returns if, amongst other things, you give us “all relevant taxation information” in a timely manner.

Accordingly, it is to your advantage that all relevant information is disclosed to us as any failure by you to provide this information may affect your ability to rely on the “safe harbour” provisions and will be considered in determining the extent to which we have discharged our obligations to you.

You are also required to advise us if you become aware of any conflict of interest or potential conflict of interest.

Generally, a conflict of interest is any event which may result in us becoming unable to remain objective in the performance of our services to you.

Some examples of events which could give rise to a conflict of interest or potential conflict of interest during this engagement are changes to your business circumstances, events affecting your family (eg. death and/or marriage breakdown) or a legal action commencing against you.

In relation to your financial records, you will be specifically responsible for retaining copies of all financial records and source documents for a period of 5 years, and providing to us all financial information we have requested within 10 working days of our request.

Please note that if you do not provide us your financial information properly reconciled and in the format requested by us, any up-front or fixed price proposals we have provided to you will not be applicable and the price for our services will be higher.

Your Rights and Obligations under Taxation Laws

You have certain rights under the taxation laws, including the right to seek a private ruling from the Australian Taxation Office (ATO) or to appeal or object against a decision made by the Commissioner.

As relevant, we will provide further information to you concerning your rights under the Australian taxation laws while we provide our service to you.

You also have certain obligations under the Australian taxation laws, such as the obligation to keep proper records and the obligation to lodge returns by the due date.

Our Obligation to Comply with the Law

We have a duty to act in your best interests. However, the duty to act in your best interests is subject to an overriding obligation to comply with the law even if that may require us to act in a manner that may be contrary to your interests.

For example, we could not lodge an Income Tax Return for you that we knew to be false in a material respect.

We also have an obligation to ensure that we manage conflicts of interest as they arise.

In this regard, we have arrangements in place to ensure that we manage potential or actual conflicts of interest.

The effective operations of these arrangements depend, in part, on you complying with your obligation to disclose any potential conflicts of interest to us (as mentioned previously).

Our advice and/or services will be based on Australian Taxation Laws in force at the date of the provision of the advice and/or services.

It is your responsibility to seek updated advice if you intend to rely on our advice at a later stage.

We note that Australian Taxation Laws are often subject to frequent change and our advice will not be updated unless specifically requested by you at the time of the change in law or announced change in law.

Complaints and Disputes

We have a complaints process in place and will use our best endeavours to resolve a complaint or dispute to the mutual satisfaction of the parties involved.

We may ask that you provide your complaint in writing to allow us to fully investigate the issues your raise.

Either party to a dispute can request the complaint or dispute is managed through external dispute resolution or mediation service.

We and you agree that external dispute resolution will be undertaken before any legal claim is formally commenced.

This does not override the rights of either party to seek legal action to enforce contractual rights under this engagement agreement.

Fees

In accordance with our quality assurance procedures, our estimated fee for:

new clients – will be provided at the beginning of our assignment; and existing clients – the estimated fee for the current year’s compliance and recurring work will be based on the prior year’s compliance and agreed with you during June each year. Our estimated fee is based upon the information we have to hand regarding your affairs.

The actual fee will depend upon the length and complexity of the work required and excludes miscellaneous expenses incurred to complete this engagement.

However, if we become aware during the assignment of the fee materially exceeding the estimate, we will contact you to discuss the matter.

We will keep you advised regarding the status of the assignment and your ongoing fees for our services.

Payment Terms

In the event of you being in default of your obligation to pay us within the payment terms as listed herein and the overdue invoice(s) are then referred to a debt collection agency and/or law firm for collection and we are charged commission and/or disbursements and/or legal fees, you agree that you will be liable to pay as a liquidated debt to us any commission, disbursements and legal fees payable by us.

Unless agreed in writing by us, our payment terms are full payment in advance.

If the amount payable on the Invoice is not paid within 30 days of the date of that Invoice, then interest will be payable by you on the total unpaid amount calculated 30 days from the date of the Invoice until the actual date of payment at the rate of 24% per annum calculated daily.

We reserve the right to advise credit agencies for non payment of invoices exceeding 90 days from invoice date.

Payment in full must be made before we lodge your Tax Returns with the Australian Taxation Office.

Period of Engagement

This engagement will start when you sign and accept our terms and make the specified upfront payment.

Ongoing Services

The list of services that we are offering under these Standard Terms of Engagement:

• Preparation of financial statements (statutory and management);
• Taxation returns, including FBT;
• Goods and services tax and activity statements;
• Corporate compliance;
• General accounting and budgeting, including cash flows;
• Business services, structuring and advice, including payroll; and
• Personal services, structuring and advice.
• Confirmation
• This Standard Terms of Engagement supersedes any previous engagement letter.

Once it has been agreed, this Standard Terms of Engagement will remain effective until it is replaced.

You or we may vary or terminate our authority to act on your behalf at any time.

Notice of variation or termination must be given in writing.

If this engagement letter is not in accordance with your understanding of the scope of our engagement or your circumstances have changed, please let us know.

Please sign below and return the this letter to indicate that it is in accordance with your understanding of the arrangements.

Our Standard Terms of Engagement will be effective for future years, and are subject to change from time to time and will be updated on our website at www.proactivereach.com.