The Board of Directors
AUDIT FOR THE YEAR ENDING 30 JUNE _______
You have requested that we audit the balance sheet of the Company as of June 30, _____ and the
related profit and loss account, statements of cash flows and changes in equity for the period/year then
ending. We are pleased to confirm our acceptance and our understanding of this engagement by means
of this letter.
1.1 We will conduct our audit in accordance with Auditing Standards as applicable in Pakistan with the
objective of expressing an opinion whether the financial statements conform with approved accounting
standards as applicable in Pakistan, and, give the information required by the Companies Ordinance,
1984, in the manner so required and respectively give a true and fair view of the state of the Company’s
affairs as at June 30, ______ and of the profit, its cash flows and changes in equity for the period/year
then ended. Those Standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatements. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.
1.2 Our report will be addressed to the Board of Directors of the Company. We cannot provide assurance
that an unqualified opinion will be rendered, since circumstances may arise in which it would be
necessary for us to modify our report or withdraw from the engagement. In such circumstances, our
findings or reasons for withdrawal will be communicated to the Board of Directors.
1.3 In view of the test nature and other inherent limitations of an audit, together with the inherent limitations
of any accounting and internal control system, there is an unavoidable risk that even some material
misstatements may remain undiscovered.
1.4 In addition to our report on the financial statements, we expect to provide you with a separate letter
concerning any material weaknesses in accounting and internal control systems, which come to our
notice. The extent to which we examine internal controls, and hence have the opportunity to observe
weaknesses, is impacted by our determination of the most efficient audit approach. We are not required
by auditing standards to make an examination of internal controls beyond that which we make in
determining the nature, extent and timing of our other audit procedures, and we have not been engaged
to report on the Company’s internal control structure.
1.5 The Company will make available to us all records, documentation, and information including minutes of
all Management and Board of Directors’ meetings we request in connection with our audit, that all
material information will be disclosed to us, and that we will have the full cooperation of the Company’s
1.6 The responsibility for the preparation of financial statements including adequate disclosures is that of the
management of the Company. This includes the maintenance of adequate accounting records and
internal controls, the selection and application of accounting policies, and the safeguarding of the assets
of the Company. Management is also responsible for identifying and ensuring that the Company
complies with laws and regulations applicable to its activities. As part of our audit process, we will request
from management written confirmation concerning representations made to us in connection with the
1.7 In addition, ISA 240, “The Auditor’s Responsibility to Consider Fraud and Error in an Audit of Financial
Statements”, requires that we obtain specific written representations from management that:
(a) it acknowledges its responsibility for the implementation and operations of accounting and internal
control systems that are designed to prevent and detect fraud and error;
(b) it believes the effects of those uncorrected financial statement misstatements aggregated by us
during the audit are immaterial, both individually and in the aggregate, to the financial statements
taken as a whole;
(c) it has disclosed to us all significant facts relating to any frauds or suspected frauds known to
management that may have affected the entity; and
(d) it has disclosed to us the results of its assessment of the risk that the financial statements may be
materially misstated as a result of fraud.
These specific items will be included in our request for written confirmation concerning representations
made to us in connection with the audit.
2. Other terms and Conditions
2.1 If you require us to complete our work under this engagement contract or, any part of it, by a specific date
or time, you will inform us in writing of your requirement. Whilst we will make every effort to complete
such work by the date specified, it is imperative that meeting any such requirement will rely on you
providing reasonable notice of your requirement and the timely provision of such information as we may
need to complete the work concerned.
2.2 In connection with this engagement, you agree that the liability to the Company of this firm, its partners,
directors, employees, and agents (in contract or under statute or otherwise) for any loss or damage
suffered by the Company arising out of, or in connection with this engagement, however the loss or
damage that is caused, including our negligence but not our wilful default, shall be limited to the amount
of fee charged for the engagement.
2.3 Tariq Mir & Co. will not be responsible or liable if information material to our task is withheld or concealed
from us or wrongly represented to us.
2.4 We will treat as such all confidential proprietary information obtained from the Company and will not
disclose such information to others, except to those persons engaged in providing services to you, or use
such information except in connection with the performance of the services agreed to in this letter. This
undertaking shall not apply to any of the information that we are required by law or by the requirements of
any regulators or by specific professional standards to disclose or that is in or hereafter enters the public
domain. Under the directive issued by the Institute of Chartered Accountants of Pakistan to audit firms,
our working paper files pertaining to the audit of the Company may be subject to Quality Control Review
(QCR) without any reference to the Company.
2.5 You will indemnify and hold harmless Tariq Mir & Co, its proprietor, agents, and employees from, and
against, any and all costs, expenses, losses, claims, demands, actions, suits, or proceedings paid,
incurred, or suffered or made or initiated against it by any third party arising out of, or in connection with,
this engagement regardless of whether the loss or damage is caused other than through our fraud or
3.1 Our fees are based on the time required by the individuals assigned to the engagement plus direct out of
pocket expenses. Individual hourly rates vary according to the degree of responsibility involved and the
experience and skill required. Our audit fees for the year ending June 30, _______ will be Rs.
_____________. Audit fee for period subsequent to June 30, ________ will be subject to separate
correspondence without amending this letter.
3.2 The above fee is exclusive of reimbursements of out of pocket expenses at actual which would include
travelling, conveyance, communication, printing and photocopying etc. At present, there is no tax or
government levy on our billings, however, in future if any tax or government levy is charged on our billing,
the same will be payable by the Company in addition to our professional fee.
This letter forms the entire agreement and understanding between us with respect to the subject matter
hereof. This letter supersedes all previous arrangements and understandings between the parties with
respect to the subject of this letter, which shall cease to have any further force or effect. Any variation to
the terms of this letter shall be made in writing and will not be effective unless signed by the proprietor of
Tariq Mir & Co or by a duly authorized representative.
This agreement is made under, and shall be governed by, Pakistan law, and all disputes arising from or
under this agreement shall be subject to the exclusive jurisdiction of the courts in Pakistan.
This letter will be effective for future periods unless it is terminated, amended or superseded. Please sign
and return the attached copy to indicate that it is in accordance with your understanding of the audit
I confirm the above terms of audit for and on behalf of the Company.
Authorised signatory: ___________________