May 21, 1997
Thomas K. Scallen, Chairman
Century Park Pictures Corporation
4701 IDS Center
Minneapolis, MN 55402
Dear Mr. Scallen:
We appreciate the opportunity to submit our proposal to serve as independent
accountants for Century Park Pictures Corporation. We believe that our firm can
provide Century Park Pictures Corporation with the professional services you
need currently and as your organization grows. Century Park Pictures Corporation
will be a valued client to our office.
Blanski Peter Kronlage & Zoch, P.A. provides a wide range of accounting,
auditing, tax, financial consulting, and management advisory services to small
and medium size businesses. Our firm has a diversified practice which includes
experience in many industries. We believe this diversification of experience
brings fresh insights from many other industries and will permit us to provide
complete financial, tax, and business guidance to your company.
Our commitment to assisting growth-oriented companies extends beyond traditional
accounting and tax services. Our comprehensive approach to professional services
requires that we provide trained professionals in areas which are frequently
needed by our clients. Our professionals have experience in meeting your needs
and anticipating the future requirements of a rapidly changing business.
Service to private businesses such as yours requires special talents and
experience, including a broad range of business consulting abilities. Some of
the key elements of our service philosophy that you will experience when you
work with us are:
1. A business approach requiring an understanding of your organization,
its philosophies, goals, and strategies.
2. A close, positive working relationship.
3. Creativity in dealing with business problems and opportunities.
4. Significant involvement of partners and managers assigned to the
engagement.
We have established a program to implement this philosophy which is designed
specifically for companies like Century Park Pictures Corporation. We provide
services at fees that are economical by bringing the disciplines of accounting,
tax, and consulting together in one client service team. The professionals in
this team are knowledgeable in taxation and business consulting as well as
accounting and auditing and specialize in working with small expanding
companies.
Engagement
We will audit the balance sheet of Century Park Pictures Corporation as of
September 30,1996 and the related statements of income and retained earnings and
cash flows for the year then ended.
Our audit will be made in accordance with generally accepted auditing standards
and will include tests of your accounting records and other procedures we
consider necessary, to enable us to express an opinion that your financial
statements are fairly presented in all material respects in conformity with
generally accepted accounting principals. Presently, due to your current
financial status, we expect to issue a qualified opinion.
Our procedures will include tests of documentary evidence supporting the
transactions recorded in the accounts, tests of the physical existence of
inventories and direct confirmation of receivables and certain other assets and
liabilities by correspondence with selected customers, creditors, and banks. We
will request written representations from your attorney as part of the
engagement, and he or she may bill you for responding to this inquiry. At the
conclusion of our audit, we will also request certain written representations
from you about the financial statements and related matters.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements; therefore, our audit will involve
judgment about the number of transactions to be examined and the areas to be
tested. Also, we will plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
However, because of the concept of reasonable assurance and because we will not
perform a detailed examination of all transactions, there is a risk that
material errors, irregularities, or illegal acts, including fraud or
defalcations, may exist and not be detected by us. We will advise you, however,
of any matters of this nature that come to our attention. Our responsibility as
auditors is limited to the period covered by our audit and does not extend to
any losses that might be incurred during any later periods for which we are not
engaged as auditors.
Fees
We are sensitive to your objective of controlling costs and will cooperate fully
to minimize our fees consistent with maintaining high standards of quality.
Our fees for services performed are based on the time requirements and the
billing rates of our professional staff, which vary by individual based on
experience and responsibility. We would plan to utilize your personnel to the
maximum extent possible in order to minimize costs. We estimate our fees will be
as follows:
From To
-------- --------
Audited financial statements for the year
ended September 30, 1996 $ 15,000 $ 20,000
Amending September 30, 1996 Form 10K $ 1,500 $ 2,500
Your present financial situation requires us to obtain a 25% retainer upon
signing the engagement letter, another 25% upon the start of field work, 25%
upon the completion of fieldwork and the final 25% upon issuance of the
financial statements. Our fee estimate is based on our knowledge of the company
at the present time and we do not expect the estimate to change unless the
company enters into significant transactions or encounters significant,
unexpected changes in their operations.
Our fees for these services plus travel and other out-of-pocket costs will be
billed each month as work progresses and are payable upon presentation. A
service charge of 12% per annum will be assessed on outstanding invoices
starting on the 31st day after the invoice date.
We are looking forward to begin working with Century Park Pictures Corporation.
If this proposal is acceptable, please indicate by signing the enclosed copy of
this letter and returning it to us.
Century Park Pictures Corporation would be a valued client to Blanski Peter
Kronlage & Zoch, P.A. If you have any questions or desire further information
please feel free to contact us.
Sincerely,
BLANSKI PETER KRONLAGE & ZOCH, P.A.
/s/ Phillip J. Kronlage, CPA /s/ Daniel J. Freeman, CPA
Phillip J. Kronlage, CPA Daniel J. Freeman, CPA
ljm
enclosure