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June 1, 2015

Carmela Smith
Chantal Goods, Inc.
Highlands Hills Street
Cebu City

Dear Ms. Smith:

You have requested that we audit the financial statements of Chantal Goods,Inc. (the
Company), which comprise the statement of financial position as at December 31, 2015, and
statement of comprehensive income, statement of changes in equity and statement of cash
flows for the year ended, and notes comprising a summary of significant accounting policies and
other explanatory information, for the purpose of expressing an opinion on them. The objectives
of this letter, together with the attached terms and conditions, are to set out our terms for
carrying out the work, to clarify respective responsibilities, and to confirm our acceptance.
We will conduct our audit in accordance with Philippine Standards on Auditing (PSAs). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. 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. Because 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.
In making our risk assessments, we consider internal control relevant to the entitys preparation
and fair presentation 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 control. 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.
Although the audit is designed to provide reasonable assurance of detecting errors and
irregularities that are material to the financial statements, it is not designed and cannot be relied
upon to disclose all fraud, defalcations, or other irregularities. However, we will inform you of
any material errors, and all irregularities or illegal acts, unless they are clearly inconsequential,
that come to our attention.
Management is responsible for the basic financial statements and all accompanying information,
as well as all representations contained therein. You are responsible for establishing and

maintaining internal controls, including monitoring ongoing activities and for the selection and
application of accounting principles.
Management is responsible for making all financial records and related information available to
us on a timely basis. Your responsibilities include adjusting the financial statements to correct
material misstatements and confirming to us in the representation letter that the effects of any
uncorrected misstatements aggregated by us during the current engagement and pertaining to
the latest period presented are immaterial, both individually and in the aggregate, to the
financial statements taken as a whole.
The procedures that we will perform are solely to provide assurance regarding accuracy of
assertions or in simple words whether financial statements reflect true state of affairs of the
entity. External auditors opinion in no way helps users to derive conclusions regarding
managerial effectiveness or future viability of the entity and thus limited only to provide
assurance regarding preparation and presentation of financial statements according to specific
accounting framework.
We estimate our fees will be from P100,000-120,000. Our fees, with additional out-of pocketexpenses, will be billed as work progresses. We will address our invoices to John Smith, VPController.

Sincerely Yours,
Vianca Pearl Amores, CPA

The services and terms as set in this letter are agreed to.
Chantal Goods, Inc.
Chantal Styles, CFA