Dear Sir XX,

We are writing at your request to confirm our understanding that we, SES Accountants (SES), has
been engaged to audit and report on the financial statements of JJJ Corporation for the year
ended December 31, 2016.

We will audit the balance sheet of JJJ Corporation as of December 31, 2016 and the related
statements of income, retained earnings and cash flows for the year then ended, for the purpose
of expressing an opinion on them. The financial statements are the responsibility of the JJJ
Corporation’s management. Our responsibility is to express an opinion on the financial
statements based on our audit.

The objective of our audit is to express an opinion whether the financial statements are presented
fairly, on all accounts, thee financial position, results of operation and cash flows of JJJ
Corporation in accordance with the Philippine Financial Reporting Standard (PFRS).

Our audit will be conducted in accordance with Philippines Standards on Auditing (PSAs) as
promulgated by the Auditing and Assurance Standard Council. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable, rather
than absolute, assurance on whether the financial statements are free of material misstatement
and/or whether due to fraud or error. Our audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our audit will also include
assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statements presentations.

There are inherent limitations in the audit process and on any accounting internal accounting
control system. Accordingly, it is unavoidable that even some material error on financial
statements may remain undiscovered.

Our procedures will include test of transactions and of existence, ownership and valuation of
assets and liabilities that are deemed necessary. We shall obtain an understanding of the
accounting systems and internal control systems to assess their adequacy as a basis for the
preparation of financial statements of the JJJ Corporation. We expect to obtain sufficient
evidences to enable us to draw reasonable conclusions from there.

Although the audit is designed to provide reasonable assurance on all material respects to the
financial statements, our audit is not designed to identify all the significant weaknesses on the JJJ
Corporation’s systems. Rest assured that we will report any material errors that come to our
notice during the course of our audit.

May we remind you that it is the management responsibility to prepare financial statements and
to provide an adequate disclosure which includes maintenance of accounting records and internal
control, selection and application of accounting policies and safeguarding the assets of the
company.

It is also the responsibility of the management to provide us with access, on a timely basis, to all
information relevant on the fair presentation of financial statements. We can also request for
additional information for the purpose of audit and unrestricted access to any person on the
management whom we can obtain sufficient evidence for audit. Failure to provide any of the
information needed to the audit may cause delay to our reports, modify our procedures, or even
terminate the engagement.

At the conclusion of our audit, we request you to provide written confirmation of certain
presentations on matters that have material effect in connection with the audit. This will also
include if the management has fulfilled its responsibility to prepare financial statements in
accordance with PFRS and all transactions are reflected in the financial statements, and if the
management has provided us all relevant information and access as part of our audit. The written
presentations and results of our audit procedures form part of the evidence that we will rely on
making an opinion on the financial statements.

Our fees for the audit services is estimated to be Php 60,000. This is exclusive of out-of-pocket
expenses and value-added tax. This is only an estimate so actual fees can exceed depending on
the nature of business or out-of-scope work. Invoices are outlined below and payment is due upon
receipt.

 Start of fieldwork 60% of fees

 Submission of final report 40% of fees + additional payments(OPEs)

We will notify you immediately in case we encounter circumstances that would significantly affect
the estimate for our audit services.

The working papers from this engagement is owned by SES Accountants which contains
confidential information. These are not available unless requested by (------) in pursuant with the
authority given by law or regulations. Access to these working papers will be made by the SES
Accountants.

This letter will remain effective from one audit appointment to another, until it is replaced arising
from changes in the scope of audit and other circumstances.

If this letter correctly expresses your understanding, please sign and return the enclosed copy of
this letter. You could also let us know if they are not in accordance with your understanding on
the arrangement of our audit in your financial statements.

We appreciate to have an opportunity to be of assistance with the JJJ Corp.