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From The AICPA Audit Committee Toolkit.
Copyright © 2005 by the American Institute of Certified Public Accountants,
Inc., New York, New York.
| Purpose of This Tool. This tool contains sample language that may be used by an organization when requesting a proposal letter from qualified CPA firms when seeking a new service provider. As such, the sample letter may be subject to audit committee review or discussion, if an audit committee exists.
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[Organization Letterhead]
[Date]
[Managing Partner]
[CPA Firm]
[Street Address]
[City, State, Zip]
Dear Sir or Madam:
Our organization is accepting proposals from CPA firms to provide audit (and tax) services for our organization in the future. We invite your firm to submit a proposal to us by June 30, 20XX, for consideration. A description of our organization, the services needed, and other pertinent information follows:
Background of ABC Organization
ABC Organization is a 501(c)(6) trade association, with a related 501(c)(3)
foundation, representing manufacturers of widgets. Annual revenues are between
$10 million and $12 million per year, and the organization employs 35 people
in one location. The organization is membership-based and has approximately
20,000 members worldwide. The organization has a June 30 fiscal year end, with
a requirement to file an audited financial statement with the bank and general
membership by September 30 of each year.
Services to Be Performed
Your proposal is expected to cover the following services:
- Annual audit to be completed in compliance with the above filing requirement
and meetings with audit committee and or board of directors, as necessary.
- Tax filings for the organization and related foundation.
- Quarterly reviews of internally prepared financial statements.
Key Personnel
Following are key contacts for information you may seek in preparing your
proposal:
| Mr. Green |
CEO |
(123) 456-7891 |
| Ms. Brown |
CFO |
(123) 456-7892 |
| Mr. White |
Controller |
(123) 456-7893 |
| Ms. Blue |
Accounting Manager |
(123) 456-7894 |
Requests for additional information, visits to our site, review of prior financial
statements and tax returns, and/or appointments with the executive director
or chief financial officer should be coordinated through our controller. You
may reach him at the number listed above. Please return the completed proposal
to my attention at the above address.
Relationship With Prior CPA Service Provider
These services have been provided by XYZ, CPAs. However, that firm is no
longer able to provide the services our organization requires. In preparing
your proposal, be advised that management will give permission to contact
the prior auditors.
| [You may use this section to
disclose whether the decision to change auditors is a function of changes
in your organization, changes in the audit firm, or result of a periodic
review of you satisfaction with the services provided. Other aspects
of your relationship with the prior auditor that you are willing to disclose
at this stage in the proposal process may also be described here. CPA
firms may request additional information, which you may choose to disclose
only if the CPA firm signs a nondisclosure agreement.] |
Other Information
| [Use this space to discuss other information that a CPA firm may need to make an informed proposal on the accounting and/or auditing work that you require. As mentioned above, you should only disclose information here that you are comfortable disclosing; additional information may be available to the CPA firms interested in making a serious proposal only after signing a nondisclosure agreement.]
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Your Response to This Request for Proposal
In responding to this request, we request the following information:
- Detail your firm’s experience in providing auditing and tax services
to companies in the not-for-profit sector, as well as associations of a comparable
size to ABC Organization, including those with international memberships.
- Provide information on whether you provide services to any related industry
associations or groups.
- Discuss the firm’s independence with respect to ABC Organization.
- Discuss commitments you will make to staff continuity, including your staff
turnover experience in the last three years.
- Identify the five largest clients your firm (or office) has lost in the
past three years and the reasons. Also discuss, in instances where loss of
the client was due to an unresolved auditing or accounting matter, the process
of attempting to resolve the issue(s).
- Identify the partner, manager, and in-charge accountant who will be assigned
to our job if you are successful in your bid, and provide biographies. Indicate
any complaints against them that have been leveled by the state board of accountancy
or other regulatory authority, if any. Indicate any corrective actions that
have been taken by the firm with respect to these people.
- Describe how your firm will approach the audit of the organization, including
the use of any association or affiliate member firm personnel and the areas
that will receive primary emphasis. Also discuss the firm’s use of technology
in the audit. And finally, discuss the communication process used by the firm
to discuss issues with the management and audit committees of the board.
- Set forth your fee proposal for the 20XX audit, with whatever guarantees
can be given regarding increases in future years. Provide your proposed fee
for the required quarterly review work and for tax preparation.
- Furnish standard billing rates for classes of professional personnel for
each of the last three years.
- Provide the names and contact information for other, similarly sized clients
of the partner and manager that will be assigned to our organization for reference
purposes.
- Describe how and why your firm is different from other firms being considered,
and why our selection of your firm as our independent accountants is the best
decision we could make.
- Include a copy of your firm’s most recent peer review report, the
related letter of comments, and the firm’s response to the letter of
comments.
Evaluation of Proposals
ABC Organization will evaluate proposals on a qualitative basis. This includes
our review of the firm’s peer review report and related materials, interviews
with senior engagement personnel to be assigned to our organization, results
of discussions with other clients, and the firm’s completeness and
timeliness in its response to us.
Please submit your response to this request for proposal by June 30, 20XX.
We would also appreciate a response if you decline to submit a proposal.
Sincerely,
Ms. Brown, CPA
Chief Financial Officer
Attachments:
Most recent financial statements and Form 990.
From The
AICPA Audit Committee Toolkit. Copyright ©
2005 by the American Institute of Certified Public Accountants, Inc., New
York, New York.
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