Audit Engagement Letter

Audit Services Engagement Agreement

This Audit Services Engagement Agreement (the “Agreement”) is entered into between Client, located at address and The Auditor, located at address (collectively, the “Parties”).

RECITALS

A. The Client has engaged the Auditor to provide audit services specific to the Client’s Business as set forth herein;

B. The Client desires that the Auditor perform such audit services (“Services”) in accordance with the terms and conditions of this Agreement; and

C. The Parties have agreed to enter into this Agreement for the purpose of setting forth the rights and obligations of the Parties with respect to the Services.

NOW THEREFORE, in consideration of the foregoing Recitals and the mutual covenants set forth below, the Parties hereto agree as follows:

1. SERVICES

The Auditor will provide the following audit services to the Client:

(a) The Auditor will complete and file a Management Representation Letter with the Client prior to the commencement of the audit.

(b) The Auditor will review and evaluate the Client’s revenue sources, revenue recognition policies, control methodology, financial statement presentation, disclosure policies, personnel issues and other matters as they pertain to the Client’s financial condition and financial reporting.

(c) The Auditor will be responsible for expressing an opinion as to the fairness of the Client’s financial statements in accordance with generally accepted auditing standards and any other necessary requirements.

(d) The Auditor will conduct an in-depth analysis of the Client’s internal accounting systems, financial controls, reporting processes, internal personnel issues and other areas as necessary to determine acceptable audit procedures.

(e) The Auditor will make all inquiries necessary in order to ascertain any matters which may affect the accuracy of the financial statements.

(f) The Auditor will evaluate the sufficiency and appropriateness of existing accounting procedures, internal controls, and make recommendations to the Client for the improvement of their processes, procedures, and strategies.

(g) The Auditor will report to clients and other stakeholders any identified control deficiencies and make suggestions for correcting them.

2. TERMS

(a) Term. The term of this Agreement shall commence on the date of execution and shall continue for one year until the next anniversary date of the Agreement.

(b) Fees. The Client shall pay the Auditor for the audit services rendered as follows: an up-front retainer of $25,000, due upon execution of this Agreement, and an additional fee of $15,000 due upon completion of the audit services.

(c) Payment. Payment by the Client shall be due within fifteen (15) business days of the date on the invoice.

(d) Indemnification. The Client agrees to indemnify and hold the Auditor harmless from any and all claims and judgements, including attorney’s fees, arising out of the performance and/or failure to perform the services called for by this Agreement.

3. MISCELLANEOUS

(a) Non-Solicitation. The Client agrees not to solicit or hire employees or subcontractors of the Auditor during the term of this Agreement or for a period of one year following

(b) Amendment and Waiver. Any amendment or waiver to this Agreement must be in writing and signed by the parties.

(c) Applicable Law. This Agreement and any dispute relating thereto shall be governed by and constructed in accordance with the laws of the State of .

(d) Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes any and all previous agreements, promises, representations, and understandings, written or oral, between the Parties as to the subject matter of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

CLIENT

AUDITOR

This Audit Engagement Memorandum is entered into between ABC Company (“ABC”) and XYZ Auditors (“XYZ”) to formalize the agreement between the parties.

ABC Company has requested that XYZ conduct an audit of its financial statements as of December 31, 20XX and for the year then ended in compliance with the norms of Generally Accepted Auditing Standards (GAAS).

XYZ shall perform the audit in conformity with GAAS. The objective of the audit is to express an opinion on the fairness of the financial statements in conformity with Generally Accepted Accounting Principles (GAAP).

XYZ will perform all necessary auditing procedures scheduled to be completed in stages. This will include an assessment of internal controls, an examination of financial records and documents, making inquiries of management and others as needed, and observing the counting of inventories.

At the conclusion of the audit, XYZ shall provide ABC with a report expressing an opinion of whether the financial statements present fairly in all material respects the financial position and results of operations of ABC in conformity with GAAP.

XYZ undertakes to maintain strict confidentiality regarding this matter and will not disclose either information or the results of the audit to persons or organizations outside ABC or associated with the audit unless required to by law.

XYZ and ABC agree to adhere to the following terms and conditions of this engagement. If any further clarifications are required, the parties will meet upon prior notice to update the terms and conditions. This memorandum shall be in force from the signing date until the conclusion of the audit.

Signed and dated this __ day of ________ 20__

XYZ Auditors

ABC Company