DEFINITIONS

“JJT” means JJT Accountants and Auditors (PTY) Ltd with registration number 2020/880498/07.
“You”, “Yourselves”, “the client”, “the company”, “the taxpayer” and any other terms which in the context in which it is used refer/ will refer to the entity that enters into an agreement with JJT where JJT provides services to the entity.
“Terms and Conditions”, means this document containing the terms and conditions of entering into an agreement procuring services to be delivered by JJT.
“Management” means those who are in control of the entity, and includes, but is not limited to, Directors, Members, Sole Proprietors and Individual Taxpayers.
“Version” refers to the content of this document. Dated 25 November 2022.

1 INTRODUCTION

This serves to confirm our understanding of the terms and objectives of our engagement and the nature and scope of the services that we will provide as your tax advisor to you. Any reference in these Terms and Conditions to the company should be read as a reference also to the subsidiary companies.

Where applicable we will communicate with the taxpayer or Sole Proprietor directly, or in the case of a company, with the Director(s), or in the case of a Close Corporation, the Member(s).

2 PERIOD OF ENGAGEMENT

This engagement will commence with the work done as per your request, either via our website or social media, directly with a staff member or partner, or any other communication that instructs us to do work for you. This engagement shall continue until it is ended in writing by either JJT or yourself. We will deal with matters arising in respect of years prior to the above engagement, as appropriate.

3 SCOPE OF SERVICES

The below are applicable to the specific service provided upon your request, either the initial request or a subsequent request.

3.1 Bookkeeping

We will prepare, from the accounts and other information and explanations provided by you, the company’s books on an accounting software you provide. The use of a properly designed and maintained cloud-based accounting package is required. As JJT is accredited by Sage Online Business Accounting (previously Sage One), it is our recommendation to use that platform for this purpose. Alternatives include Quickbooks Online , Xero and FNB’s Instant Accounting (if you have an FNB Gold Business bank account).

There should be a minimum of 2 licenses purchased for the software, one (or more) used by yourself, and a minimum of 1 license available to JJT. For this purpose you should send the accountant invitation to the email address we will confirm.
Your responsibilities:
1. Process of customer quotes and invoices
2. Following-up and collection of payments from debtors
3. Processing of supplier invoices
4. Stock maintenance
5. Operations
6. Allocating payments to/from suppliers/customers to specific invoices
JJT’s responsibilities:
1. Processing of bank statements
2. Bank reconciliations
3. Allocation of payments to client and supplier accounts
4. Answering general enquiries from you
5. We can assist with items ii; iii; iv and vi of subsection b if you provide us with the information necessary.

3.2 Financial Statements

We will prepare, from the accounts and other information and explanations provided by you the financial statements as required by the Companies’ Act of 2008. The purpose for which the financial statements will be used is to provide full-year financial information showing the company's financial position at the financial reporting date, being the entity’s financial year end, and financial performance for the year then ended. The financial statements will be solely for your use and will not be distributed to other parties.

Our Responsibility

A compilation engagement involves applying expertise in accounting and financial reporting to assist you in the preparation and presentation of financial information. Since a compilation engagement is not an assurance engagement, we are not required to verify the accuracy or completeness of the information you provide to us for the compilation engagement, or otherwise to gather evidence to express an audit opinion or a review conclusion. Accordingly, we will not express an audit opinion or a review conclusion on whether the financial statements are prepared in accordance with the basis of accounting you have specified, as described above.

We will perform the compilation engagement in accordance with the International Standard on Related Services (ISRS) 4410 (Revised), Compilation Engagements. ISRS 4410 (Revised) requires that, in undertaking this engagement, we comply with relevant ethical requirements, including principles of integrity, objectivity, professional competence and due care. For that purpose, we are required to comply with the International Ethics Standards Board for Professional Accountants' Code of Ethics

for Professional Accountants (IESBA Code).

Your Responsibilities

The compilation engagement to be performed is conducted on the basis that you acknowledge and understand that our role is to assist you in the preparation and presentation of the financial statements in accordance with the financial reporting framework you have adopted for the financial statements. Accordingly, you have the following overall responsibilities that are fundamental to our undertaking the compilation engagement in accordance with ISRS 4410 (Revised): 2

(i) Responsibility for the financial statements and the preparation and presentation thereof in accordance with a financial reporting framework that is acceptable in view of the intended use of the financial statements and the intended users.

(ii) Responsibility for the accuracy and completeness of the records, documents, explanations and other information you provide to us for the purpose of compiling the financial statements.

(iii) Responsibility for the judgements needed in the preparation and presentation of the financial statements, including those for which we may provide assistance in the course of the compilation engagement.

3.3 Audits

The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (ISAs) will always detect material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The audit will include such tests of transactions and of the existence, ownership and valuation of assets and liabilities, as we consider necessary.

3.3.1 We will conduct our audit in accordance with ISAs. Those standards require that we comply with ethical requirements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 entity’s 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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 ISAs.

Our audit will be conducted on the basis that [management and, where appropriate, those charged with governance] acknowledge and understand that they have responsibility:

For the preparation and fair presentation of the financial statements in accordance with the International Financial Reporting Standards for Small and Medium Sized Entities;
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; and
To provide us with:
1. Access to all information of which [management] is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;
2. Additional information that we may request from [management] for the purpose of the audit; and

Unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence.

As part of our audit process, we will request from [management and, where appropriate, those charged with governance], written confirmation concerning representations made to us in connection with the audit. We require full cooperation from your staff during our audit, failure may mean a qualification on the audit report.

Detection of fraud, error and non-compliance with laws and regulations

The primary responsibility for safeguarding the assets of the company and the prevention and detection of fraud, error and non-compliance with laws or regulations rests with the director and management.

It is the responsibility of the director of the company to ensure through oversight of management, that the company establishes and maintains internal control to provide reasonable assurance with regard to the reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable laws and regulations.

It is the responsibility of management to establish a control environment and maintain policies and procedures to assist in achieving the objective of ensuring, as far as possible, the orderly and efficient conduct of the company's business.

Our audit is planned and performed so that we have reasonable, but not absolute, assurance of detecting material misstatements in the financial statements or accounting records, including any material misstatements resulting from fraud, error or non-compliance with laws or regulations.

Our audit will not include a detailed audit of transactions, such as would be necessary to disclose errors or fraud that did not cause a material misstatement to the financial statements. Our audit is designed to provide reasonable assurance of detecting errors and irregularities that are material to the financial statements. However, there are inherent limitations in an audit. For example:

We do not examine evidence supporting every transaction, and
although we obtain an understanding of the accounting systems and related controls to assist us in designing our audit, we study and evaluate only those controls on which we intend to rely.

Thus, irregularities, if they exist, may not be detected. Moreover, because of the characteristics of irregularities, including concealment through collusion or forgery, a properly designed and executed audit may not necessarily detect a significant irregularity.

However, we will communicate any illegal acts, material errors, identified fraud or information that indicates that a fraud may exist, identified during our audit, to the appropriate level of management as soon as practicable.

Professional obligation to respond to non-compliance with laws and regulations in terms of the IESBA Code of Professional Conduct (the Code)

The partners and employees of our firm have a professional obligation to act in the public interest, and to act in order to: (i) enable the client to rectify, remediate or mitigate the consequences of any identified or suspected noncompliance with laws or regulations as described in the Code; or (ii) deter the commission of the noncompliance or suspected non-compliance with laws or regulations where it has not yet occurred.

Non-compliance with laws or regulations (non-compliance) comprises acts of omission or commission, intentional or unintentional, committed by a client, or by those charged with governance, by management or by other individuals working for or under the direction of a client which are contrary to the prevailing laws or regulations.

Where we encounter non-compliance or suspected non-compliance we will seek to obtain an understanding of the matter.

Where appropriate, we will discuss the matter with the appropriate level of management at the company, or those charged with governance in order that such people can take appropriate action to rectify, remediate or mitigate the consequences of the non-compliance, deter the commission of non-compliance where it has not yet occurred or disclose the matter to an appropriate authority where required by law or regulation or where considered necessary in the public interest, having regard to the appropriateness of the response of management and, where applicable, those charged with governance and other relevant factors in accordance with the Code.

We are also, in encountering non-compliance or suspected non-compliance, obliged to comply with applicable legislation or professional standards, which may require us to disclose the matter to an appropriate authority, including the reporting of reportable irregularities as referred to in the preceding section of this engagement letter.

We also have a professional responsibility to consider whether the response of the company to the instance of non-compliance or suspected non-compliance is adequate, and may determine that further action is necessary. Such further action may include, among other actions, the disclosure of the matter to an appropriate authority. We will disclose the matter to an appropriate authority only where, in the professional judgement of the independent reviewer, the extent of the actual or potential harm that is or may be caused to the company, investors, creditors or employees or the general public is sufficient to justify the disclosure.

In exceptional circumstances, we may be required to immediately disclose the matter to an appropriate authority where we have become aware of actual or intended conduct that we have reason to believe would constitute an imminent breach of law or regulation that would cause substantial harm to the company, investors, creditors, employees or the general public. In such circumstances we will discuss the matter with the management or those charged with governance of the company where it is appropriate to do so.

Financial Intelligence Centre Act

In terms of Section 29 of the Financial Intelligence Centre Act we are required by law to report to the Financial Intelligence Centre certain suspicious or unusual transactions of which we become aware, such as those which may involve money laundering, which have no apparent business or lawful purpose, or which may be relevant to an investigation of evasion or attempted evasion of tax. This statutory requirement, which applies to both prospective clients and existing clients, overrides the professional ethics rules of confidentiality, which we observe.

Reportable Irregularities

A reportable irregularity in terms of the Auditing Profession Act is any unlawful act or omission committed by any person responsible for the management of an entity, which:

(a) has caused or is likely to cause material financial loss to the entity or to any partner, member, shareholder, creditor or investor of the entity in respect of his, her or its dealings with that entity; or

(b) is fraudulent or amounts to theft; or

(c) represents a material breach of any fiduciary duty owed by such person to the entity or any partner, member,

shareholder, creditor or investor of the entity under any law applying to the entity or the conduct or management thereof.

In relation to companies the management board usually comprises:

(a) The director of the company and holding entities in group situations; and

(b) Any person who in the affairs of the company exercises executive control which reflects the general policy of the company for the time being or which is related to the general administration of the company.

In considering whether a person is responsible for managing an entity an auditor will have due regard both to the published details of the management structure thereof and to the de facto exercise of the requisite characteristics of control and management.

We are required by the Auditing Profession Act, 26 of 2005 (the “APA”) to send a written report to the Independent Regulatory Board of Auditors (“IRBA”) if we are satisfied or have reason to believe that a reportable irregularity (as defined in the APA) has taken place or is taking place.

We undertake to notify the director of such action within three days of sending a report to the IRBA. We will subsequently take all reasonable steps to discuss the report with the director who will be afforded the opportunity to make representations in respect thereof.

We are also required to send a second report to the IRBA, within 30 days from the date on which the initial report was sent, which should contain a statement that we are of the opinion that:

(a) no reportable irregularity has taken place; or

(b) the suspected reportable irregularity is no longer taking place and that adequate steps have been taken for the prevention or recovery of any loss as result thereof, if relevant; or

(c) the reportable irregularity is continuing

If the IRBA receives a report that a reportable irregularity is continuing, they must notify any appropriate Regulator of the details of the reportable irregularity to which the report relates and provide it with a copy of the report.

Should a reportable irregularity have taken place or be taking place our audit report on the financial statements is required to be appropriately qualified.

The firm requires its staff to report any suspected reportable irregularity to the engagement partner immediately, without delay. Should an employee fail to adhere to this requirement they will face a disciplinary hearing and possible termination of their training contract and/or dismissal.

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 addition to our report on the financial statements, we expect to provide you with a separate letter concerning any material weaknesses, in the accounting and internal control system, which come to our attention.

As part of our audit process, we will request from management written confirmation concerning representations made to us in connection with the audit.

To assist us with our audit of your financial statements, you are also responsible for making available to us, as and when required, all minutes of important meetings, and information and explanations which we consider necessary for the performance of our duties as auditors. We shall also request sight of all documents or statements that are to be issued with the

financial statements.

3.4 Tax returns

We will prepare, from the accounts and other information and explanations provided by you the tax returns and computations, together with all supporting schedules and, where necessary, amended returns.

We will send your tax returns and supporting schedules, to you for approval and signature. Thereafter we will submit all relevant documents to the South African Revenue Service (“SARS”). [Authorisation is required from you in writing, to file the return electronically.]

We will advise as to the amount of tax to be paid over and the deadline dates for these submissions, which will be present on the assessment we will obtain from SARS and send to you. Where appropriate, we will initiate repayment claims when tax has been overpaid.

Where applicable we will advise you whether provisional tax payments ought to be made, but to do this you

will need to provide us with appropriate management information.

We will advise as to possible claims and elections arising from the tax return and from information supplied by you. Where instructed by you, we will make such claims and elections in the form and manner required by SARS.

We will deal with all communications relating to the company’s tax return which may need to be addressed to us by SARS or yourself. However, if SARS choose your return for enquiry, this work may need to be the subject of a separate assignment, in which case, we will require further instruction from yourself.

We will prepare/help you in preparing the tax provisions and disclosures to be included in the company’s statutory accounts.

4 YOUR RESPONSIBILITIES: INFORMATION AND DOCUMENTS

The company is legally responsible for submitting correct returns by the due date and making timeous payment of tax due. Failure to meet the deadlines may result in automatic penalties and/or interest.

To enable us to carry out our work you agree:

that all returns are to be made on the basis of full disclosure of all sources of income, expenses, allowances and capital transactions;
to provide full information necessary for dealing with the company’s affairs: we will rely on the information and documents being true, correct and complete and will not audit the information or those documents;
that we can approach such third parties as may be appropriate for information that we consider necessary to deal with the company’s affairs;
to provide us with information in sufficient time for the company’s tax return to be completed and submitted by [insert date]; in order to meet this date, you agree to provide us with all relevant information by [insert date];
to forward to us on receipt copies of all SARS statements of account, notices of assessment, letters and other communications received from SARS to enable us to deal with them as deemed necessary within the statutory time limits; and
to keep us informed about significant transactions or changes in circumstances if this is likely to affect the company’s tax position.

Responsibilities of Management

You will retain responsibility and accountability for:

(a) the management, conduct and operation of your business and affairs;

(b) any representations made by the company to third parties, including published information;

(c) the maintenance of the accounting records;

(d) the establishment and maintenance of an internal control structure, necessary to provide reasonable assurance that adopted policies and prescribed procedures are adhered to for the prevention of errors and irregularities, including fraud and illegal acts;

(e) the preparation of the annual financial statements which fairly present the financial position, results of operations and cash flows of the company, including adequate disclosure in accordance with the International Financial Reporting Standards for Small and Medium Sized Entities, or International Financial Reporting Standards;

(f) the selection and application of accounting policies;

(g) the safeguarding of assets;

(h) the use of, extent of reliance on, or implementation of advice or recommendation supplied by us or other product of the services;

(i) the delivery, achievement or realisation of any benefits directly or indirectly related to the services that require implementation by you;

(j) ensuring that all arrangements are made for access, security procedures, virus checks, facilities, licenses and/or consents (without any to us), where you require us to do so or the nature of the services is such that it is likely to be more efficient for us to perform work at your premises or use your computer systems or telephone networks.

5 OTHER SERVICES AND GENERAL TAX ADVICE

We will be pleased to assist you generally in tax matters if so required. To enable us to assist you further, timeous notification is required.

Due to tax rules frequently changing, you need to ask us to review any advice already given if a transaction is delayed, or if an apparently similar transaction is to be undertaken.

It is our policy to confirm, in writing, any advice upon which you may wish to rely.

We will be pleased also to advise the directors and executives on their personal income tax affairs.

If further services and advice are required, a separate engagement letter will be issued.

6 EXCLUDED SERVICES

This document relates only to the items specified above and does not extend to other taxes such as Pay As You Earn, Value Added Tax [insert additional].

We will be pleased to advise on any of these tax matters if so requested.

7 RECORDING OF CORRESPONDENCE

Since a lot of correspondence happens via telephonic conversations, JJT may record telephone calls and do not need to expressly inform you that a call is being recorded. When a telephone call had been recorded, we would agree to make a copy of the recording available to you upon your specific request.

Emails and other written correspondence may be retained for our record.

8 TERMS AND CONDITIONS OF ENGAGEMENT

Our services are subject to the terms and conditions of engagement attached hereto as Annexure A, which is an integral part of this agreement.

By continuing with your

If you do not understand these terms and conditions, please advise.

We look forward to full cooperation from your staff and we trust that any documentation, records and other information which may be requested, will be made readily available to us at all times.

We appreciate the opportunity of being of service to you.

You acknowledge the content of this version, which fully records the terms and conditions any agreement between both parties relating to our appointment to carry out the work described herein are subject to.

ANNEXURE A

TERMS AND CONDITIONS OF ENGAGEMENT

1 CLIENT MONIES

We will not hold money on your behalf.

2 RETENTION OF RECORDS

During the course of our work we will collect information from you and others acting on your behalf and will return any original documents to you following preparation of your return. You should retain them for a period of five years from the date of submission of your return. This period may be extended if SARS make any further enquiries into your tax return.

Whilst certain documents may legally belong to you, we intend to destroy correspondence and other paperwork which has been stored for longer than 5 years, other than documents which we consider to be of continuing significance. We need to be advised of any particular retention of documents you may require.

3 REGULATORY REQUIREMENTS

We reserve the right to disclose our files to regulatory bodies in the exercise of their powers.

4 QUALITY OF SERVICE

We aim to provide a high standard of service at all times. If you would like to discuss with us on any improvements or dissatisfaction of our services, please advise.

We undertake to address any complaint on your behalf and promptly advise you accordingly.

5 FEES

[If fees are calculated on any other basis, for example a fixed amount then different wording should

be used.]

Our charges are computed on the basis of fees for the time spent on your affairs (which depends on the levels of skill and responsibility involved) and disbursements incurred in connection with the engagement. [If work is required which is outside the scope of this version, for example dealing with SARS enquiries into the tax return, then this will be a separate engagement for which additional fees will be chargeable as per our quotes and/or propsals, as amended.] We will issue invoices at [monthly/quarterly/six-monthly] intervals during the course of the year. We will add Value Added Tax, if applicable, at the current rate.

Our invoices are payable on presentation. We reserve the right to charge interest at the monthly rate of 2 % on accounts not settled within 30 days. All accounts overdue by more than 90 days will be handed over for collection. Please note that once the matter has been handed over for collection, you will be liable for all collection costs.

We would like to request that you please ensure that you pay any outstanding monies timeously to avoid steps being taken. Should you wish to arrange a settlement or to establish a payment plan, kindly contact us at clientservice@jjtacc.co.za with your request. This will be individually considered based on merit and your payment history. at Prime per year charged monthly in the case of overdue accounts. We may terminate our engagement and cease acting if payment of any fees billed are unduly delayed. However, it is not our intention to use these arrangements in a way which is unfair or unreasonable.

6 LIMITATION OF LIABILITY

The advice which we give to you is for your sole use only and does not constitute advice to any third parties.

Our maximum liability for all claims arising out of the services provided shall be limited to an amount equal to twice the total fees charged. This maximum liability shall be an aggregate liability for all claims from whatever source and howsoever arising.

We will not be held liable to you or any cessionary or third party claiming through or on your behalf for any punitive damages whatsoever or for any consequential or other loss or damages beyond the maximum liability specified.

We will provide the professional services outlined in this letter with reasonable care and skill. Our advice will be based on interpretation of the law and experience with SARS. Therefore, the conclusions reached and views expressed will often be matters of opinion rather than of certainty and we cannot warrant that SARS will necessarily reach the same conclusions. We will not be responsible for any losses, penalties, interest or additional tax liabilities arising from the supply by you or others of incorrect or incomplete information, or from the failure by you or others to supply any appropriate information or your failure to act on our advice or respond promptly to communications from us or SARS.

Communication via email is admissible, however, as with other means of delivery this carries with it the risk of inadvertent misdirection or non-delivery. It is the responsibility of the recipient to carry out a check on any attachments received. No verbal instructions are acceptable.

7 ELECTRONIC COMMUNICATION

As internet communications are capable of data corruption we do not accept any responsibility for changes made to such communications after their despatch. For this reason, it may be inappropriate to rely on advice contained in an e-mail without obtaining written confirmation thereof. All risks connected with sending commercially-sensitive information relating to your business are borne by you and is not our responsibility. If you do not accept this risk, you should notify us in writing that e-mail communication is unacceptable.

8 APPLICABLE LAW

This engagement letter is governed by South African law and any claims will be subject to the exclusive jurisdiction of the Courts of South Africa.

Any claims, howsoever arising, need to be commenced formally by service of a court summons or process initiating arbitration proceedings within two years after the claimant becomes aware (or ought reasonably to have become aware) of the facts which give rise to the claim and, in any event regardless of the knowledge of the claimant, by no later than three years after the date of any alleged breach giving rise to a cause of action. This expressly overrides any statutory provision which would otherwise apply.

9 AGREEMENT OF TERMS

This version of the Terms and Conditions supersedes any previous version. Once accepted, this version will remain effective from the date of acceptance until it is replaced. When this version is replaced, this fact will be communicated to all clients via email and likely via social media.

10. I understand that additional information may be required, including but not limited to copies of all Director(s)' ID's, latest signed financial statements, bank confirmation letter, shareholder agreements, company registration documents, proof of address for company and responsible Director.

11. In terms of the Protection of Personal Information Act, 2013, I agree that this information may be collected and used by JJT Accountants and Auditors (PTY) Ltd for the purpose of communicating about and providing the services queried herein. I understand JJT Accountants and Auditors (PTY) Ltd will not distribute this information unless required by law or with my explicit permission.

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