33/F Grand Emerald Towers

JANE MARA AQUINO Ruby Road Ortigas Center Pasig Contact No. +63 917-513-3233
Certified Public Accountant City
October 15, 2019

Elizabeth Susao
Terazza De Sto. Tomas Home Owner’s Association
Sto. Tomas, Batangas

Gentlemen:

I am pleased to submit this proposal letter to provide external audit services to Terazza De Sto. Tomas Home
Owner’s Association for the period November 2018 to June 2019. This letter, which will also serve as our
engagement letter if accepted, outlines our terms and fee arrangement regarding the professional work that I
will render to your company.

OBJECTIVE
Our objective is to obtain and evaluate evidence about your company’s financial statements for the purpose of
expressing an opinion on whether they are presented fairly in conformity with Philippine Accounting
Standards and Philippine Financial Reporting Standards for SMEs.

ROLES AND RESPONSIBILITIES

I will conduct the audit in accordance with the Philippine Standards on Auditing (PSA). In conducting the
audit, I will perform tests of the accounting records and such other procedures as I consider necessary in the
circumstances to provide a reasonable basis for my opinion on the financial statements. I will also assess the
accounting principles used and significant estimates made by management, and evaluate the overall financial
statement presentation.

As required by Philippine Standards on Auditing, I will make specific inquiries with management about the
representations embodied in the financial statements and the effectiveness of internal control, and obtain a
representation letter from management about these matters. The responses to our inquiries, the written
representation, and the results of audit tests, among other things, comprise the evidential matter I will rely
upon in forming an opinion on the financial statements.

My report will be addressed to the board of directors of the company and will be in a form that is in
accordance with the published rules and regulations of the Bureau of Internal Revenue (BIR) and/or Securities
and Exchange Commission (SEC). I cannot provide assurance that an unqualified opinion will be rendered.
Circumstances may arise in which it is necessary for me to modify my report or withdraw from the
engagement. In such circumstances, my findings or reasons for withdrawal will be communicated to the audit
committee.

The management of Terazza De Sto. Tomas Home Owner’s Association has responsibility for the financial
statements and all representations contained therein. Management also is responsible for identifying and
ensuring that the company complies with laws and regulations applicable to its activities, for preventing and
detecting fraud, for adopting sound accounting policies, and for establishing and maintaining effective internal
control over financial reporting to maintain the reliability of the financial statements and to provide reasonable
assurance against the possibility of misstatements that are material to the financial statements.

While I am not being engaged to report on Terazza De Sto. Tomas Home Owner’s Association internal
control and are not obligated to search for reportable conditions, I will communicate reportable conditions to
you to the extent they come to my attention. Reportable conditions are significant deficiencies in the design or
operation of internal control which could adversely affect the organization’s ability to record, process,
summarize and report financial data consistent with the assertions of management in the financial statements.
The definition of “reportable conditions” does not include potential future internal control problems, i.e.,
control problems coming to our attention that do not affect the preparation of financial statements for the
period under audit.

Circumstances may arise in which it is necessary for me to bring to your attention any scope limitation,
inconvenience, uncooperative staff or member of the management, or undue influence that may be inflicted by
the staff or management of your company. Such circumstances, when not properly and promptly addressed,
may cause my withdrawal from the engagement.
JANE MARA AQUINO
Certified Public Accountant

PERSONNEL ASSISTANCE
Terazza De Sto. Tomas Home Owner’s Association agrees that all records, documentation, and information
I request in connection with my audit will be made available to us, that all material information will be
disclosed to us, and that I will have the full cooperation of Terazza De Sto. Tomas Home Owner’s
Association personnel. Any delays that would require us to extend our engagement would be separately
billed.

DELIVERABLES
At the end of the audit, I will issue an audit opinion on the company’s financial statements; attached to it are
the Statement of Management's Responsibility for the financial statements, Statement of Financial Condition,
Statement of Operations, and Statement of Changes in Equity, Statement of Cash Flows, and all the necessary
Notes to Financial Statements. I will also guide you in the preparation of your Annual Income Tax Return.

PROFESSIONAL FEE
The fees will be based on estimated time to be spent, skills required and assumed responsibility. I therefore
propose to bill you the amount of Ten Thousand Pesos only (P =10,000) inclusive of Out-Of-Pocket Expenses
(OPEs).
Audit fees for the work will be billed as follows:

Timing Base Professional Fee

in PHP

Upon acceptance of this audit proposal 7,500

Upon submission of Audited Financial Statements to the client 7,500

Total 15,000

I appreciate the opportunity to extend my relationship with Terazza De Sto. Tomas Home Owner’s
Association and believe that my knowledge and experience offer a unique and mutually beneficial
professional relationship.

I shall be pleased to discuss this letter with you at any time. For your convenience in confirming these
arrangements, I enclose a copy of this letter. Please sign and return it to me.

Very truly yours,

Jane Mara T. Aquino

CPA Certificate No. 0169513

Accepted and agreed:

Terazza De Sto. Tomas Home Owner’s Association

By: __________________________

Title: __________________________

Date: __________________________