Based on Standard Terms of Delivery for Accounting Services
Accounting Norway 2017, version 2 (Oct. 2017)
Standard terms of engagement
1. The agreement between the parties
1.1 The agreement framework between the parties
The Customer («the Customer») and the Accounting Firm («the Accounting Firm») have entered into an agreement whereby the Accounting Firm shall undertake certain tasks related to bookkeeping, etc., on behalf of the Customer in accordance with the Assignment Specification. These Standard Terms of Engagement supplement the Assignment Specification and regulate the general terms and conditions applicable between the Customer and the Accounting Firm (each referred to as a «Party» and collectively the «Parties») in the engagement relationship.
The engagement presupposes that the accounting firm has carried out the necessary customer due diligence measures in accordance with the Act relating to measures to combat money laundering and terrorist financing (the Anti-Money Laundering Act) before the engagement commences. If customer due diligence cannot be carried out or approved, the agreement shall not enter into force, and the accounting firm may decline to accept the engagement without liability. Any specified deadlines shall run only from the time KYC is approved.
The engagement further presupposes that the customer faithfully answers the questions the accounting firm may have in connection with the performance of customer due diligence and, if necessary, provides documentation that can verify the customer's information. If the Accounting Firm does not find it possible to carry out legally required customer due diligence, the Customer shall be notified.
The agreement framework between the Customer and the Accounting Firm consists of the following parts:
The Assignment Specification, which states which services and responsibilities the Accounting Firm has undertaken to perform on behalf of the Customer;
The Standard Terms of Engagement, which state the general contractual terms and conditions applicable between the Parties;
Any appendices concerning other services agreed between the Parties that are not set out in the Assignment Specification.
The Assignment Specification, Standard Terms of Engagement and any supplementary appendices, etc. will be referred to collectively as the Engagement Agreement.
In the event of any conflict between the Standard Terms of Engagement and the Assignment Specification, the Assignment Specification shall prevail where it is clearly stated. In the event of any conflict between the Assignment Specification and any other appendices, the specific appendix shall prevail to the extent applicable where it is clearly stated and the appendix is the most recent in time.
1.2 Background and purpose of the agreement
The engagement entails the Parties collaborating to prepare accounting reports and submit returns as defined in the Engagement Agreement, etc. The Engagement Agreement does not relieve the Customer of its own obligation to submit accurate returns and prepare reports in accordance with the law, but the Accounting Firm undertakes a defined obligation to prepare more specifically defined reports, returns, etc. on the basis of the Customer's information and material. The cooperation between the Parties depends on good and complete communication and on the Customer contributing correct facts.
2. Collaboration questions
2.1 The Client's obligations
For accounting, reports and submissions to the public authorities to be correct, the Client must:
Provide information and actively cooperate so that the Accounting Firm can carry out the assignment;
Ensure that accounting material handed over to the Accounting Firm is complete and related to the business;
Comply with the deadlines stated in the Assignment Specification;
Without being asked, clarify how the accounting material is to be treated in the Client's business, if it is not clearly apparent from the accounting material;
Pay invoices when due;
Follow the instructions in place for delivering and receiving information digitally;
Notify the Accounting Firm of anything that may be significant for the performance of the assignment;
Inform the Accounting Firm of notices and information from the public authorities that are relevant to the assignment;
The Client shall, without undue delay, provide the necessary information and documentation for the completion and ongoing updating of KYC, including confirming beneficial owners and changes in the business.
The cooperation requires that the Client, as soon as the accounts, reports, tax returns etc. have been made available, reviews them and notifies the Accounting Firm of possible errors and deficiencies where possible.
Inquiries from the Accounting Firm shall be answered as soon as possible.
2.2 Communication and documentation
The parties shall have designated representatives who ensure proper electronic communication to the provided email addresses in the Assignment Specification.
Legislation sets requirements for the storage of records subject to retention, and all such accounting material may be stored electronically. By «accounting material subject to retention» is meant accounting material as referred to in section 13 (1) of the Bookkeeping Act.
If accounting material is handed over to the Accounting Firm on paper, the Accounting Firm may shred the material after it has been securely stored electronically.
Delivery and availability to the Client of accounting material takes place electronically in accordance with section 9.3.
2.3 Supervision, insurance, etc.
The Client is aware that the Financial Supervisory Authority and the industry organization may request access to relevant accounting material and full access to physical and electronic archives documenting the Accounting Firm's work, including necessary access to IT systems, in connection with their inspection.
Furthermore, the Client is aware that the Accounting Firm is subject to the rules of the Anti-Money Laundering Act. The Accounting Firm is insured with professional liability insurance.
2.4 Confidentiality
Section 10 of the Accounting Firms Act governs the Accounting Firm's duty of confidentiality.
In addition, pursuant to section 5 of this agreement and section 1 of the Personal Data Act cf. Regulation (EU) 2016/679) Article 28 no. 3 letter b, the Accounting Firm is obliged to process personal data confidentially.
The duty of confidentiality does not apply where the Accounting Firm, at its own discretion and on its own initiative, chooses to inform a person who has personal responsibility for the financial statements at the Client's, as this person is not considered an unauthorized third party.
Information that the Client becomes aware of as a result of the assignment shall be treated confidentially.
3. Accounting firm's services and obligations
The accounting firm is, in performing the assignment, subject to the requirements and obligations set out in the Engagement Agreement, and shall perform its duties in accordance with the requirements arising from legislation, including accounting legislation, bookkeeping legislation, tax and duties legislation, company legislation and good accounting practice (GRFS).
As part of the assignment, the Accounting Firm will normally offer advice within the scope of the accounting area. Other advice may be provided on the basis of a separate agreement. The Customer is solely responsible for assessing what expertise the specific questions require.
4. Authorization to access information and submit tasks
The accounting firm is authorized, on its own initiative, to:
Request accounting information from relevant third parties, including ledger details and bank statements;
Request all relevant information for completing official filings, including downloading electronic data into the Accounting Firm's relevant software;
Complete and submit official filings via Altinn or any other submission portal used by the relevant authorities. This includes signing the filing(s) on behalf of the Client. Such signature may only be made where the Accounting Firm believes this is not contrary to good accounting practice and the Accounting Firm has no reason to doubt the basis for or accuracy of the filing;
Disclose ledger information to the Client's customers and suppliers.
Other authorizations, e.g. authority over accounts owned by the Client, are documented through written authorization or an engagement agreement.
When signing on behalf of the Client, the Accounting Firm only confirms that the submitted filings correspond to registered and documented information, and that, to the best of the Accounting Firm's knowledge, the information corresponds to the actual facts.
The Accounting Firm is entitled to delegate the authorization, including all matters regulated herein, to employees of the Accounting Firm. There is an overview of which persons in the Accounting Firm exercise the authorization. This authorization applies from the conclusion of this agreement and until the assignment ends, or the authorization is revoked in writing.
5. The accounting firm's processing of personal data on behalf of the customer
5.1 Introduction
The Customer is the controller and has the right and obligation to determine the purpose of the processing of personal data, and which means shall be used for the processing. The Customer has an obligation to ensure that there is a valid legal basis for the processing that the Accounting Firm is to carry out. The Accounting Firm processes personal data on behalf of the Customer and is a processor.
5.2 The nature and purpose of the processing
The Accounting Firm's processing of personal data is carried out for the purpose of ensuring correct identification, accounting reporting and withholding information, as well as communication purposes. The Accounting Firm will only process personal data on behalf of the Customer in accordance with the Engagement Agreement and the tasks set out in the Engagement Specification, or pursuant to documentable instructions from the Customer.
The processing will continue for as long as the Engagement Agreement between the Parties remains in force. The Accounting Firm stores accounting records containing associated personal data in accordance with what has been agreed in the Engagement Specification and statutory requirements for the retention of accounting and engagement documentation, etc. When the statutory retention period expires, the personal data will be deleted.
The purpose of and nature of the Accounting Firm's processing of personal data is to fulfil the obligations incumbent on the Customer and the Accounting Firm, including accounting obligations, etc. Processing of personal data under the Engagement Agreement applies to personal data that has been collected, stored or otherwise processed pursuant to the special legislation applicable at any given time, see section 5.3. The Accounting Firm does not process personal data beyond what is set out in the Engagement Agreement between the Parties or the special legislation. If the Parties choose, in their cooperation, to process personal data beyond such mandatory processing, a separate agreement shall be entered into in a separate annex to the Engagement Agreement.
5.3 Types of personal data processed
The Accounting Firm will process personal data to fulfil its obligations under the Engagement Agreement and the special legislation applicable at any given time, including accounting legislation, bookkeeping legislation, company legislation, the Anti-Money Laundering Act, tax legislation, the National Insurance Act, the Working Environment Act and GRFS.
The types of personal data processed on behalf of the Customer are set out in Appendix 1 – Description of processing of personal data (“Appendix 1”).
5.4 Use of subcontractors
The Accounting Firm has the right at any time to use subcontractors to fulfil its obligations under the Engagement Agreement. Upon entering into the engagement agreement, the Accounting Firm provides the Customer with an overview of the subcontractors used by the Accounting Firm and where, in connection with the engagement relationship, personal data is processed, and which the Customer approves by signing the Engagement Agreement. The Accounting Firm will notify the Customer if a new subcontractor is used that the Customer has not previously been made aware of. The notification procedure is described in more detail in Appendix 1.
The Accounting Firm shall ensure that processing of personal data carried out by subcontractors is subject to the same obligations as those imposed on the Accounting Firm under the Engagement Agreement with the Customer.
5.5 Data protection security
The Parties shall implement appropriate technical and organizational security measures to the extent considered appropriate and necessary when processing personal data. At the Customer's request, the Accounting Firm shall be able to demonstrate how the Customer fulfils its obligations in the contractual relationship in accordance with data protection legislation.
If the Parties, through their planned review of data protection security or otherwise, discover a breach of data protection security, the Parties shall notify the other Party without undue delay. If a breach of data protection security is discovered, the Customer is responsible for notifying the Data Protection Authority and, where applicable, the data subject(s) if such notification is required.
The Customer is responsible for the accuracy, integrity, content and reliability of the personal data. The Accounting Firm is not responsible for breaches of privacy rules caused by the Customer's unauthorized use of the IT system, or actions taken by the Customer's personnel or persons to whom the Customer has granted access.
5.6 Liability and compensation
The Customer may be held liable for any damage caused by processing that is contrary to the data protection legislation applicable at any time. The Accounting Firm may be held liable for breaches of data protection legislation that are directed directly at the Accounting Firm, or breaches resulting from the Accounting Firm acting contrary to or beyond the Customer's lawful, documentable instructions. Neither Party may be held liable for damages if it is demonstrated that the Parties are not responsible for the event causing the claim for damages. In the event of a claim for damages, the right of recourse rule in GDPR Article 82(5) applies.
If a Party is subject to an administrative fine that is wholly or partly due to the other Party, the Party subject to the fine may claim recourse for the part attributable to the other Party's circumstances.
General principles and conditions of tort law, including requirements of proof, requirements of causation and rules on the assessment of damages, apply insofar as they do not conflict with the data protection legislation applicable at any time.
6. Copyright
The accounting firm holds the copyright to its own intellectual works, work methods, and methodological basis. The accounting firm is subject to rules of confidentiality and good business practice. Unless otherwise agreed in writing, the accounting firm may commercially use general knowledge.
7. Fees and payment terms
At the start of the engagement, fees are calculated on the basis of the accepted offer. The accounting firm's fees may change and are calculated according to the accounting firm's rates in force at any time.
8. Default
8.1 When there is a breach
A breach exists if one of the Parties does not fulfill the other Party's justified expectation under the Service Agreement or general background law.
8.2 The Parties' obligations in the event of breach
In order for remedies for breach to be enforced, there must be a written notice of complaint. The notice shall be sent electronically and clearly state that there is a breach of contract and which remedy for breach will be claimed. The notice must be sent without undue delay after the Party has become or should have become aware of the circumstances alleged. The remedy for breach must be proportionate to the breach. If breach is alleged because the submitted invoice is not lawful, the complaint must be made by the invoice due date.
8.3 Termination
The Parties have the right to terminate the Service Agreement in the event of material breach. The Accounting Firm is deemed to have materially breached the Service Agreement if:
Performance of the assignment deviates materially from the rules applicable to the services that the Accounting Firm has undertaken to perform under the Service Agreement; or • The Accounting Firm's deadline for delivery is not met, and delivery has still not been made within one week after notice is received from the Customer, and the delay is not due to circumstances on the Customer's side;
The Customer is deemed to have materially breached the Service Agreement if:
The Customer has not paid the due fee plus interest within 14 days from the Accounting Firm's reminder;
The Accounting Firm is not given the opportunity to perform its assignment in a proper manner, because the Accounting Firm does not receive the necessary documentation, or communication between the Parties fails in form or content;
The Customer acts in such a way that it is no longer possible to carry out legally required customer due diligence measures pursuant to the Anti-Money Laundering Act, or the result of the completed customer due diligence measures does not provide an adequate or satisfactory conclusion;
The Accounting Firm is attempted to be required to perform the assignment in violation of laws and regulations, or;
The Customer intentionally or with gross negligence makes entries, etc. in the system in order to evade tax or duty in violation of applicable regulations.
Termination of the Service Agreement shall be made by a written declaration called a "termination declaration", etc. The declaration shall provide a brief description of the reason for the termination and be delivered electronically. The Parties' obligations under this service agreement cease immediately after a proper termination declaration has been sent.
In the event that the Service Agreement is terminated on the basis of material breach by the Customer, the Accounting Firm is entitled to remuneration in accordance with point 9.2 on termination when the Accounting Firm does not perform accounting services under the Service Agreement during the notice period.
8.4 Economic consequences of breach
As a remedy for breach, the Parties may choose the ordinary remedies, namely:
For the Customer
Price reduction;
Termination.
For the Accounting Firm
Replacement performance;
Right to suspend and retain, cf. point 8.5.
In addition or alone, damages may be claimed depending on the circumstances. The amount of damages shall cover the Party's financial loss, however:
In unjustified termination by the Customer, the average monthly fee based on the last twelve months is charged, for the period as if the assignment had been terminated under point 9;
In the event of erroneous or missing delivery from the Accounting Firm, indirect loss or loss caused by third parties, or circumstances beyond the Accounting Firm's control, is not covered;
In the event of erroneous or missing delivery from the Accounting Firm that is not due to intent or gross negligence, liability is limited to six times the annual fee, or a maximum of NOK 1 million.
Each of the Parties shall thus bear responsibility for its own use and registration in the Accounting System.
The Accounting Firm is not liable for errors or deficiencies in the accounting system, communication, data security, lack of maintenance, backup, reconstruction, or other matters not caused by the Accounting Firm.
8.5 Special provisions on the right to suspend, right of retention and blocking access to the Accounting System
In the event of the Customer's breach, the Accounting Firm may suspend the work and/or exercise a right of retention in documents, materials or other items that the Accounting Firm has prepared, until the breach ceases. The Accounting Firm shall notify the Customer when the Accounting Firm suspends the work, withholds accounting material or blocks access to the Accounting System, cf. point 8.2.
The Accounting Firm's right of retention does not include accounting material received from the Customer.
If the Customer is placed under insolvency proceedings, or it otherwise becomes clear that the Customer's ability to fulfill its obligations under this service agreement ceases, the Accounting Firm may suspend the work.
Blocking access to the Accounting System may only take place where the Accountant is the license holder of the Accounting System, cf. the Assignment Specification. Blocking means that both the Customer's supporting documents and the Accounting Firm's material will be inaccessible to the Customer. Supporting documents may be copied and delivered to the Customer in PDF or in another generally available format against advance payment to the Accounting Firm.
The Accounting Firm is not liable for any deadline overruns, late fees, etc. incurred by the Customer as a result of the right to suspend or the right of retention being exercised. If the Accounting Firm chooses to perform the assignment and meets the agreed deadlines, the Accounting Firm may charge additional remuneration on the basis of increased effort, overtime or similar.
The Accounting Firm may suspend the delivery and/or block access in the event of missing KYC, lack of cooperation or other circumstances that prevent lawful performance of the assignment.
9. Termination
9.1 Termination and notice period
The Engagement Agreement continues until it is terminated by one of the Parties. Notice shall be given to the other Party in writing, and it must clearly state that it is a notice of termination.
The notice period is regulated in the engagement specification and is calculated from the time the notice was received by the Party, unless the exception in clause 10 applies.
The accounting firm may terminate the agreement with immediate effect if KYC cannot be carried out or approved.
9.2 The Parties' obligations and rights during the notice period
The Parties' obligations under the Engagement Agreement continue during the notice period. This includes the Accounting Firm carrying out the tasks that would normally, under the Engagement Agreement, be performed in the months covered by the notice period, and the Client shall pay remuneration in accordance with the applicable fee provisions. If the notice period expires during the annual accounts period, the Accounting Firm's duties also include finalizing the annual accounts and tax return with appendices, unless the Client, at the same time as giving notice, informs the Accounting Firm that the Accounting Firm is not to prepare these.
The Client may choose that the Accounting Firm is not to perform the agreed work during the notice period. The Accounting Firm is nevertheless entitled to remuneration corresponding to the average monthly fee based on the last twelve months.
9.3 The Parties' obligations after the expiry of the notice period
The Client has the formal responsibility for the storage of accounting records.
The Accounting Firm may, as a service, store the Client's records subject to the storage obligation, electronically or physically, against remuneration in accordance with the Accounting Firm's current price list at any given time, cf. clause 7. Such a storage agreement shall in that case be stated in the Engagement Specification. If no such agreement has been entered into, the Accounting Firm will hand over the Client's records subject to the storage obligation and other accounting material in a generally accessible format (pdf, excel, etc.). Recorded accounting information is delivered in the accounting system's file format or in a standard data format for electronic accounting material (SAF-T). Other accounting material is handed over in its original medium.
Delivery of accounting material is invoiced according to ordinary principles. The Accounting Firm is entitled to remuneration based on time spent, as well as remuneration for any subcontractors, for conversion and delivery of accounting material.
If the Accounting Firm is not obliged to retain accounting material (either because this has not been agreed or because the obligation has ceased as a result of the Client's breach), the Accounting Firm may destroy the material 30 days after notice of destruction has been sent to the affected parties as referred to in GRFS clause 4.7.
10. Change of Party and Failed Assumptions
The parties may only transfer their rights and obligations under the Engagement Agreement after written consent from the other Party. Such consent shall be granted if there is no reasonable ground for refusing the transfer. This provision does not prevent the Accounting Firm from assigning its receivables to others, e.g. in connection with factoring.
The Engagement Agreement has been entered into on certain assumptions. In the event of material changes in the assumptions for the engagement, for example material changes in the scope of the engagement, risk, the Client's ownership, stock exchange listings, mergers, demergers or other significant organizational changes, the Accounting Firm may terminate the engagement with a notice period limited to the period before the changed assumption takes effect for the engagement.
11. Conflict and Jurisdiction
Disputes under the Service Agreement shall be resolved in accordance with Norwegian law, with the accounting firm’s place of business as the venue.