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What is a Representation Letter?

A representation letter is a written statement provided by a company’s management to its auditors as part of the audit process. The representation letter confirms that the information provided to the auditors is complete, accurate, and fairly presented in accordance with the applicable financial reporting framework. The letter also confirms that the management has disclosed to the auditors all relevant information that may be necessary for the auditors to properly understand the company’s financial position, results of operations, and cash flows. The representation letter helps to ensure that the auditors have all the necessary information to conduct an audit in accordance with professional standards.

Why is a Representation Letter Required?

The purpose of the representation letter is to provide the auditor with assurance that the financial statements accurately reflect the company’s financial position and performance. The letter also helps the auditor to identify any potential areas of concern or risk that may need to be addressed during the audit process.

Contents of a Representation Letter

A representation letter typically includes the following:

  • A statement that the financial statements being audited are complete and accurate
  • A statement that the financial statements are in accordance with generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS)
  • A statement that the company’s management team is responsible for the preparation and fair presentation of the financial statements
  • A statement that the company’s management team has made all necessary disclosures in the financial statements
  • A statement that the company’s management team has disclosed all material transactions and events that have occurred during the period being audited
  • A statement that the company’s management team has disclosed all material off-balance sheet transactions, arrangements, and obligations
  • A statement that the company’s management team has disclosed all material changes in accounting principles that have occurred during the period being audited
  • A statement that the company’s management team has disclosed all material related-party transactions that have occurred during the period being audited
  • A statement that the company’s management team has disclosed all material contingencies and commitments that have occurred during the period being audited

The representation letter may also include other representations, such as a representation that the company has complied with all relevant laws and regulations, and that there are no pending legal proceedings that could have a material impact on the financial statements.

Importance of the Representation Letter

The representation letter is an important part of the audit process, as it provides the auditor with assurance that the financial statements are accurate and complete. This helps the auditor to form an opinion on the financial statements and to issue an audit report stating whether the financial statements are presented fairly, in all material respects.

Without a representation letter, the auditor may not be able to complete the audit, as they may not have sufficient evidence to form an opinion on the financial statements. This could lead to delays or other issues in the audit process, and may impact the company’s ability to obtain financing or meet other regulatory requirements.

In summary, a representation letter is a written statement signed by the company’s management that confirms the accuracy and completeness of the financial statements. It is an important part of the audit process, as it helps the auditor to form an opinion on the financial statements and to issue an audit report.

what is representation letter

Amy is a Certified Public Accountant (CPA), having worked in the accounting industry for 14 years. She is a seasoned finance executive having held various positions both in public accounting and most recently as the Chief Financial Officer of a large manufacturing company based out of Michigan.

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What is a Representation Letter?

An auditor’s responsibility is to gather audit evidence regarding a subject matter. This evidence comes from several audit procedures. Based on this evidence, the auditor must conclude whether the subject matter meets specific criteria. In the case of external audits , it includes examining a client’s financial statements to establish whether they are free from material misstatements.

A representation letter is a form of written representation obtain from a client. Written representations are audit evidence that auditors collect. Similarly, they are necessary information that auditors may require related to a specific audit assignment. These are similar to audit inquiries but in a written form. The international auditing standard that deals with written representations are ISA 580 Written Representations.

Once presented to the management, a senior official will sign the representation letter. Usually, a client’s CEO, CFO, or other higher senior accounting personnel sign the letter. This process must take place before auditors present an audit report regarding the client’s financial statements. The content of the representation letter may vary from one firm to another. However, there are some similar elements or contents that are present in every representation letter.

What are the Contents of the Representation Letter?

1. The management is responsible for the proper presentation and accurate preparation of the financial statements. It will also include a reference to the applicable accounting framework for this purpose. 2. The auditors have received all the financial records related to the audit. 3. The board of directors meeting minutes are complete. 4. There are no unrecorded transactions. 5. The management has disclosed all related party transactions. 6. The management has provided all letters from regulatory agencies regarding financial reporting noncompliance if required. 7. The net effect of all uncorrected misstatements is immaterial. 8. The financial statements conform to the applicable accounting standards. 9. The management doesn’t have any knowledge of fraud within the company. 10. The financial statements account for all material transactions. 11. The management is responsible for systems designed to detect and prevent fraud. 12. The client has disclosed all liens and other encumbrances on its assets. 13. The management has disclosed all contingent liabilities. 14. The management acknowledges its responsibility for the system of financial controls. 15. The client has disclosed all unasserted claims or assessments.

Overall, the representation letter will consist of all the management’s responsibilities for the financial statements and the audit. This letter will decrease the auditors’ responsibility if there is a future dispute. Similarly, it places responsibility on the management for areas where it must ensure proper accounting and controls. Auditors will not allow the management to make changes to the representation letter before signing.

What Happens If Auditors Cannot Obtain Reliable Representation Letters?

If auditors conclude that the representation letter is not reliable, they must take appropriate actions. These may include establishing the possible effect on the opinion in the auditor’s report. The same cases will apply when the management refuses to provide a representation letter. The auditor must discuss it with the management before taking any actions.

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What is the difference between an Engagement Letter and Representation Letter?

The Engagement Letter is the contract between our firm and the Association to perform requested services (i.e. conducting the annual audit and preparing tax returns). The Board and Management need to sign and return the Engagement Letter to our office before we may commence the work.

The Representation Letter is issued with the draft audit and is required by auditing standards to finalize the audit. The Representation Letter is a letter from the Association to our firm confirming responsibilities of the board and management for the financial statements, as well as confirming information provided to us during the audit. The President or Treasurer and Management need to sign the Representation Letter and return it back to our office within 60 days from the date the draft audit was issued. Representation Letters received after the 60-day mark may result in additional auditing procedures in order to finalize the audit and comply with auditing standards at an additional expense to the Association.

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what is representation letter

AS 2805: Management Representations

Summary table of contents.

  • .01  Introduction
  • .02  Reliance on Management Representations
  • .05  Obtaining Written Representations
  • .13  Scope Limitations
  • .15  Effective Date
  • .16  Appendix A - Illustrative Management Representation Letter
  • .17  Appendix B - Additional Illustrative Representations
  • .18  Appendix C - Illustrative Updating Management Representation Letter

Introduction

.01        This section establishes a requirement that the independent auditor obtain written representations from management as a part of an audit of financial statements performed in accordance with the standards of the PCAOB and provides guidance concerning the representations to be obtained.

Reliance on Management Representations

.02        During an audit, management makes many representations to the auditor, both oral and written, in response to specific inquiries or through the financial statements. Such representations from management are part of the evidential matter the independent auditor obtains, but they are not a substitute for the application of those auditing procedures necessary to afford a reasonable basis for an opinion regarding the financial statements under audit. Written representations from management ordinarily confirm representations explicitly or implicitly given to the auditor, indicate and document the continuing appropriateness of such representations, and reduce the possibility of misunderstanding concerning the matters that are the subject of the representations. 1

.03        The auditor obtains written representations from management to complement other auditing procedures. In many cases, the auditor applies auditing procedures specifically designed to obtain evidential matter concerning matters that also are the subject of written representations. For example, after the auditor performs the procedures described in AS 2410, Related Parties , the auditor should obtain a written representation that management has no knowledge of any relationships or transactions with related parties that have not been properly accounted for and adequately disclosed. The auditor should obtain this written representation even if the results of those procedures indicate that relationships and transactions with related parties have been properly accounted for and adequately disclosed. In some circumstances, evidential matter that can be obtained by the application of auditing procedures other than inquiry is limited; therefore, the auditor obtains written representations to provide additional evidential matter. For example, if an entity plans to discontinue a line of business and the auditor is not able to obtain sufficient information through other auditing procedures to corroborate the plan or intent, the auditor obtains a written representation to provide evidence of management's intent.

.04        If a representation made by management is contradicted by other audit evidence, the auditor should investigate the circumstances and consider the reliability of the representation made. Based on the circumstances, the auditor should consider whether his or her reliance on management's representations relating to other aspects of the financial statements is appropriate and justified.

Obtaining Written Representations

.05        Written representations from management should be obtained for all financial statements and periods covered by the auditor's report. 2 For example, if comparative financial statements are reported on, the written representations obtained at the completion of the most recent audit should address all periods being reported on. The specific written representations obtained by the auditor will depend on the circumstances of the engagement and the nature and basis of presentation of the financial statements. The auditor should provide a copy of the representation letter to the audit committee if management has not already provided the representation letter to the audit committee.

Note: When performing an integrated audit of financial statements and internal control over financial reporting, refer to paragraphs .75-.77 of AS 2201, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements , for additional required written representations to be obtained from management.

.06        In connection with an audit of financial statements presented in accordance with generally accepted accounting principles, specific representations should relate to the following matters: 3

Financial Statements

  • Management's acknowledgment of its responsibility for the fair presentation in the financial statements of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles.
  • Management's belief that the financial statements are fairly presented in conformity with generally accepted accounting principles.

Completeness of Information

  • Availability of all financial records and related data, including the names of all related parties and all relationships and transactions with related parties.
  • Completeness and availability of all minutes of meetings of stockholders, directors, and committees of directors.
  • Communications from regulatory agencies concerning noncompliance with or deficiencies in financial reporting practices.
  • Absence of (1) unrecorded transactions  and (2) side agreements or other arrangements (either written or oral) undisclosed to the auditor .

Recognition, Measurement, and Disclosure

  • Management's belief that the effects of any uncorrected financial statement misstatements 4 aggregated by the auditor during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. 5 (A summary of such items should be included in or attached to the letter.) 6 , 7
  • Management's acknowledgment of its responsibility for the design and implementation of programs and controls to prevent and detect fraud.
  • Knowledge of fraud or suspected fraud affecting the entity involving (1) management, (2) employees who have significant roles in internal control, or (3) others where the fraud could have a material effect on the financial statements.
  • Knowledge of any allegations of fraud or suspected fraud affecting the entity received in communications from employees, former employees, analysts, regulators, short sellers, or others.
  • Plans or intentions that may affect the carrying value or classification of assets or liabilities.
  • Information concerning related party transactions and amounts receivable from or payable to related parties, including support for any assertion that a transaction with a related party was conducted on terms equivalent to those prevailing in an arm's-length transaction. 9
  • Guarantees, whether written or oral, under which the entity is contingently liable.
  • Significant estimates and material concentrations known to management that are required to be disclosed in accordance with the AICPA's Statement of Position 94-6, Disclosure of Certain Significant Risks and Uncertainties .
  • Violations or possible violations of laws or regulations whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency. 10
  • Unasserted claims or assessments that the entity's lawyer has advised are probable of assertion and must be disclosed in accordance with Financial Accounting Standards Board (FASB) Statement No. 5, Accounting for Contingencies [AC section C59]. 11
  • Other liabilities and gain or loss contingencies that are required to be accrued or disclosed by FASB Statement No. 5 [AC section C59]. 12
  • Satisfactory title to assets, liens or encumbrances on assets, and assets pledged as collateral.
  • Compliance with aspects of contractual agreements that may affect the financial statements.

  s-1 .    The appropriateness of the methods, the consistency in application, the accuracy and completeness of data, and the reasonableness of significant assumptions used by the company in developing accounting estimates.

Subsequent Events

  • Information concerning subsequent events. 13

.07        The representation letter ordinarily should be tailored to include additional appropriate representations from management relating to matters specific to the entity's business or industry. Examples of additional representations that may be appropriate are provided in appendix B, "Additional Illustrative Representations" [paragraph .17].

.08        Management's representations may be limited to matters that are considered either individually or collectively material to the financial statements, provided management and the auditor have reached an understanding on materiality for this purpose. Materiality may be different for different representations. A discussion of materiality may be included explicitly in the representation letter, in either qualitative or quantitative terms. Materiality considerations would not apply to those representations that are not directly related to amounts included in the financial statements, for example, items ( a ), ( c ), ( d ), and ( e ) above. In addition, because of the possible effects of fraud on other aspects of the audit, materiality would not apply to item ( h ) above with respect to management or those employees who have significant roles in internal control.

.09        The written representations should be addressed to the auditor. Because the auditor is concerned with events occurring through the date of his or her report that may require adjustment to or disclosure in the financial statements, the representations should be made as of the date of the auditor's report. [If the auditor "dual dates" his or her report, the auditor should consider whether obtaining additional representations relating to the subsequent event is appropriate. See paragraph .05 of AS 3110, Dating of the Independent Auditor's Report ]. The letter should be signed by those members of management with overall responsibility for financial and operating matters whom the auditor believes are responsible for and knowledgeable about, directly or through others in the organization, the matters covered by the representations. Such members of management normally include the chief executive officer and chief financial officer or others with equivalent positions in the entity.

.10        If current management was not present during all periods covered by the auditor's report, the auditor should nevertheless obtain written representations from current management on all such periods. The specific written representations obtained by the auditor will depend on the circumstances of the engagement and the nature and basis of presentation of the financial statements. As discussed in paragraph .08, management's representations may be limited to matters that are considered either individually or collectively material to the financial statements.

.11        In certain circumstances, the auditor may want to obtain written representations from other individuals. For example, he or she may want to obtain written representations about the completeness of the minutes of the meetings of stockholders, directors, and committees of directors from the person responsible for keeping such minutes. Also, if the independent auditor performs an audit of the financial statements of a subsidiary but does not audit those of the parent company, he or she may want to obtain representations from management of the parent company concerning matters that may affect the subsidiary, such as related-party transactions or the parent company's intention to provide continuing financial support to the subsidiary.

.12        There are circumstances in which an auditor should obtain updating representation letters from management. If a predecessor auditor is requested by a former client to reissue (or consent to the reuse of) his or her report on the financial statements of a prior period, and those financial statements are to be presented on a comparative basis with audited financial statements of a subsequent period, the predecessor auditor should obtain an updating representation letter from the management of the former client. 15 Also, when performing subsequent events procedures in connection with filings under the Securities Act of 1933, the auditor should obtain certain written representations. 16 The updating management representation letter should state ( a ) whether any information has come to management's attention that would cause them to believe that any of the previous representations should be modified, and ( b ) whether any events have occurred subsequent to the balance-sheet date of the latest financial statements reported on by the auditor that would require adjustment to or disclosure in those financial statements. 17

Scope Limitations

.13        Management's refusal to furnish written representations constitutes a limitation on the scope of the audit sufficient to preclude an unqualified opinion and is ordinarily sufficient to cause an auditor to disclaim an opinion or withdraw from the engagement. 18 However, based on the nature of the representations not obtained or the circumstances of the refusal, the auditor may conclude that a qualified opinion is appropriate. Further, the auditor should consider the effects of the refusal on his or her ability to rely on other management representations.

.14        If the auditor is precluded from performing procedures he or she considers necessary in the circumstances with respect to a matter that is material to the financial statements, even though management has given representations concerning the matter, there is a limitation on the scope of the audit, and the auditor should qualify his or her opinion or disclaim an opinion.

Effective Date

.15        This section is effective for audits of financial statements for periods ending on or after June 30, 1998. Earlier application is permitted.

Appendix A - Illustrative Management Representation Letter

.16        

1.    The following letter, which relates to an audit of financial statements prepared in conformity with generally accepted accounting principles, is presented for illustrative purposes only. The introductory paragraph should specify the financial statements and periods covered by the auditor's report, for example, "balance sheets of XYZ Company as of December 31, 19X1 and 19X0, and the related statements of income and retained earnings and cash flows for the years then ended." The written representations to be obtained should be based on the circumstances of the engagement and the nature and basis of presentation of the financial statements being audited. ( See appendix B [paragraph .17]).

2.    If matters exist that should be disclosed to the auditor, they should be indicated by modifying the related representation. For example, if an event subsequent to the date of the balance sheet has been disclosed in the financial statements, the final paragraph could be modified as follows: "To the best of our knowledge and belief, except as discussed in Note X to the financial statements, no events have occurred" In appropriate circumstances, item 9 could be modified as follows: "The company has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities, except for its plans to dispose of segment A, as disclosed in Note X to the financial statements, which are discussed in the minutes of the December 7, 20X1, meeting of the board of directors." Similarly, if management has received a communication regarding an allegation of fraud or suspected fraud, item 8 could be modified as follows: "Except for the allegation discussed in the minutes of the December 7, 20X1, meeting of the board of directors (or disclosed to you at our meeting on October 15, 20X1), we have no knowledge of any allegations of fraud or suspected fraud affecting the company received in communications from employees, former employees, analysts, regulators, short sellers, or others."

3.    The qualitative discussion of materiality used in the illustrative letter is adapted from FASB Statement of Financial Accounting Concepts No. 2, Qualitative Characteristics of Accounting Information .

4.    Certain terms are used in the illustrative letter that are described elsewhere in authoritative literature. Examples are fraud, in AS 2401, Consideration of Fraud in a Financial Statement Audit , and related parties, in AS 2410,  Related Parties . To avoid misunderstanding concerning the meaning of such terms, the auditor may wish to furnish those definitions to management or request that the definitions be included in the written representations.

5.    The illustrative letter assumes that management and the auditor have reached an understanding on the limits of materiality for purposes of the written representations. However, it should be noted that a materiality limit would not apply for certain representations, as explained in paragraph .08 of this section.

To [ Independent Auditor ]

We are providing this letter in connection with your audit(s) of the [ identification of financial statements ] of [ name of entity ] as of [ dates ] and for the [ periods ] for the purpose of expressing an opinion as to whether the [ consolidated ] financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of [ name of entity ] in conformity with accounting principles generally accepted in the United States of America. We confirm that we are responsible for the fair presentation in the [ consolidated ] financial statements of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles.

Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.

We confirm, to the best of our knowledge and belief, [ as of (date of auditor's report), ] the following representations made to you during your audit(s).

  • The financial statements referred to above are fairly presented in conformity with accounting principles generally accepted in the United States of America.
  • Financial records and related data, including the names of all related parties and all relationships and transactions with related parties.
  • Minutes of the meetings of stockholders, directors, and committees of directors, or summaries of actions of recent meetings for which minutes have not yet been prepared.
  • There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in financial reporting practices.
  • There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements.
  • We believe that the effects of the uncorrected financial statement misstatements summarized in the accompanying schedule are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. 1
  • We acknowledge our responsibility for the design and implementation of programs and controls to prevent and detect fraud.
  • Management,
  • Employees who have significant roles in internal control, or
  • Others where the fraud could have a material effect on the financial statements.
  • We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received in communications from employees, former employees, analysts, regulators, short sellers, or others.
  • The company has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.
  • Related-party transactions, including sales, purchases, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties.
  • Guarantees, whether written or oral, under which the company is contingently liable.
  • Significant estimates and material concentrations known to management that are required to be disclosed in accordance with the AICPA's Statement of Position 94-6, Disclosure of Certain Significant Risks and Uncertainties. [ Significant estimates are estimates at the balance sheet date that could change materially within the next year. Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year. ]
  • Violations or possible violations of laws or regulations whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency.
  • Unasserted claims or assessments that our lawyer has advised us are probable of assertion and must be disclosed in accordance with Financial Accounting Standards Board (FASB) Statement No. 5, Accounting for Contingencies . 2
  • Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by FASB Statement No. 5.
  • Side agreements or other arrangements (either written or oral) that have not been disclosed to you.
  • The company has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.
  • The company has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance.

[ Add additional representations that are unique to the entity's business or industry. See paragraph .07 and appendix B [paragraph .17] of this section. ]

To the best of our knowledge and belief, no events have occurred subsequent to the balance-sheet date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements.

____________________________________________ [ Name of Chief Executive Officer and Title ]

____________________________________________ [ Name of Chief Financial Officer and Title ]

[As amended, effective for audits of financial statements for periods beginning on or after December 15, 1999 by Statement on Auditing Standards No. 89. As amended, effective for audits of financial statements for periods beginning on or after December 15, 2002, by Statement on Auditing Standards No. 99.]

Appendix B - Additional Illustrative Representations

.17        

1.    As discussed in paragraph .07 of this section, representation letters ordinarily should be tailored to include additional appropriate representations from management relating to matters specific to the entity's business or industry. The following is a list of additional representations that may be appropriate in certain situations. This list is not intended to be all-inclusive. The auditor also should consider the effects of pronouncements issued subsequent to the issuance of this section.

General
Condition
Unaudited interim information accompanies the financial statements.The unaudited interim financial information accompanying [ ] the financial statements for the [ ] has been prepared and presented in conformity with generally accepted accounting principles applicable to interim financial information [ ]. The accounting principles used to prepare the unaudited interim financial information are consistent with those used to prepare the audited financial statements.
The impact of a new accounting principle is not known.We have not completed the process of evaluating the impact that will result from adopting Financial Accounting Standards Board (FASB) Statement No. [ ], as discussed in Note [ ]. The company is therefore unable to disclose the impact that adopting FASB Statement No. [ ] will have on its financial position and the results of operations when such Statement is adopted.
There is justification for a change in accounting principles.We believe that [ ] is preferable to [ because [ ].
Financial circumstances are strained, with disclosure of management's intentions and the entity's ability to continue as a going concern.Note [ ] to the financial statements discloses all of the matters of which we are aware that are relevant to the company's ability to continue as a going concern, including significant conditions and events, and management's plans.
The possibility exists that the value of specific significant long-lived assets or certain identifiable intangibles may be impaired.We have reviewed long-lived assets and certain identifiable intangibles to be held and used for impairment whenever events or changes in circumstances have indicated that the carrying amount of its assets might not be recoverable and have appropriately recorded the adjustment.
The entity engages in transactions with special purpose entities.We have evaluated all transactions involving special purpose entities to determine that the accounting for such transactions is in accordance with generally accepted accounting principles. Specifically [indicate appropriate accounting principles:

• Conditions pursuant to paragraph 35 of FASB Statement 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities"

• EITF Issue No. 96-16, "Investor's Accounting for an Investee When the Investor Has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have certain Approval or Veto Rights"

• EITF Issue No. 90-15, "Impact of Nonsubstantive Lessors, Residual Value Guarantees, and Other Provisions in Leasing Transactions"

• EITF Issue 96-21, "Implementation in Accounting for Leasing Transactions involving Special-Purpose Entities"

• EITF 97-1, "Implementation Issues in Accounting for Lease Transactions, including Those involving Special-Purpose Entities"

• EITF Issue No. 97-2, "Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician Practice Management [PPM] Entities and Certain Other Entities with Contractual Management Arrangements"

• EITF Issue No. 00-4, "Majority Owner's Accounting for a transaction in the Shares of a Consolidated Subsidiary and a Derivative Indexed to the Minority Interest in That Subsidiary."]
The work of a specialist has been used by the entity.We agree with the findings of specialists in evaluating the [ ] and have adequately considered the qualifications of the specialist in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists.
Assets
ConditionIllustrative Examples

Disclosure is required of compensating balances or other arrangements involving restrictions on cash balances, line of credit, or similar arrangements.
Arrangements with financial institutions involving compensating balances or other arrangements involving restrictions on cash balances, line of credit, or similar arrangements have been properly disclosed.
Management intends to and has the ability to hold to maturity debt securities classified as held-to-maturity.Debt securities that have been classified as held-to-maturity have been so classified due to the company's intent to hold such securities, to maturity and the company's ability to do so. All other debt securities have been classified as available-for-sale or trading.
Management considers the decline in value of debt or equity securities to be temporary.We consider the decline in value of debt or equity securities classified as either available-for-sale or held-to-maturity to be temporary.
Management has determined the fair value of significant financial instruments that do not have readily determinable market values.The methods and significant assumptions used to determine fair values of financial instruments are as follows: [ The methods and significant assumptions used result in a measure of fair value appropriate for financial statement measurement and disclosure purposes.
There are financial instruments with off-balance-sheet risk and financial instruments with concentrations of credit risk.The following information about financial instruments with off-balance-sheet risk and financial instruments with concentrations of credit risk has been properly disclosed in the financial statements:

1. The extent, nature, and terms of financial instruments with off-balance-sheet risk

2. The amount of credit risk of financial instruments with off-balance-sheet risk and information about the collateral supporting such financial instruments

3. Significant concentrations of credit risk arising from all financial instruments and information about the collateral supporting such financial instruments

Receivables have been recorded in the financial statements.
Receivables recorded in the financial statements represent valid claims against debtors for sales or other charges arising on or before the balance-sheet date and have been appropriately reduced to their estimated net realizable value.
Excess or obsolete inventories exist.Provision has been made to reduce excess or obsolete inventories to their estimated net realizable value.

There are unusual considerations involved in determining the application of equity accounting.
• The equity method is used to account for the company's investment in the common stock of [ ] because the company has the ability to exercise significant influence over the investee's operating and financial policies.

• The cost method is used to account for the company's investment in the common stock of [investee] because the company does not have the ability to exercise significant influence over the investee's operating and financial policies.

Material expenditures have been deferred.
We believe that all material expenditures that have been deferred to future periods will be recoverable.
A deferred tax asset exists at the balance-sheet date.The valuation allowance has been determined pursuant to the provisions of FASB Statement No. 109, , including the company's estimation of future taxable income, if necessary, and is adequate to reduce the total deferred tax asset to an amount that will more likely than not be realized. [ ]
or
A valuation allowance against deferred tax assets at the balance-sheet date is not considered necessary because it is more likely than not the deferred tax asset will be fully realized.
Liabilities
ConditionIllustrative Examples

Short-term debt could be refinanced on a long-term basis and management intends to do so.
The company has excluded short-term obligations totaling $[ ] from current liabilities because it intends to refinance the obligations on a long-term basis. ]

• The company has issued a long-term obligation [ ] after the date of the balance sheet but prior to the issuance of the financial statements for the purpose of refinancing the short-term obligations on a long-term basis.

• The company has the ability to consummate the refinancing, by using the financing agreement referred to in Note [ ] to the financial statements.
Tax-exempt bonds have been issued.Tax-exempt bonds issued have retained their tax-exempt status.

Management intends to reinvest undistributed earnings of a foreign subsidiary.
We intend to reinvest the undistributed earnings of [ ].
Estimates and disclosures have been made of environmental remediation liabilities and related loss contingencies.Provision has been made for any material loss that is probable from environmental remediation liabilities associated with [ ]. We believe that such estimate is reasonable based on available information and that the liabilities and related loss contingencies and the expected outcome of uncertainties have been adequately described in the company's financial statements.
Agreements may exist to repurchase assets previously sold.Agreements to repurchase assets previously sold have been properly disclosed.
An actuary has been used to measure pension liabilities and costs.We believe that the actuarial assumptions and methods used to measure pension liabilities and costs for financial accounting purposes are appropriate in the circumstances.
There is involvement with a multiemployer plan.We are unable to determine the possibility of a withdrawal liability in a multiemployer benefit plan.
or
We have determined that there is the possibility of a withdrawal liability in a multiemployer plan in the amount of $[ ].
Postretirement benefits have been eliminated.We do not intend to compensate for the elimination of postretirement benefits by granting an increase in pension benefits.
or
We plan to compensate for the elimination of postretirement benefits by granting an increase in pension benefits in the amount of $[ ].
Employee layoffs that would otherwise lead to a curtailment of a benefit plan are intended to be temporary.Current employee layoffs are intended to be temporary.
Management intends to either continue to make or not make frequent amendments to its pension or other postretirement benefit plans, which may affect the amortization period of prior service cost, or has expressed a substantive commitment to increase benefit obligations.We plan to continue to make frequent amendments to its pension or other postretirement benefit plans, which may affect the amortization period of prior service cost.
or
We do not plan to make frequent amendments to its pension or other postretirement benefit plans.
Equity
ConditionIllustrative Example
There are capital stock repurchase options or agreements or capital stock reserved for options, warrants, conversions, or other requirements.Capital stock repurchase options or agreements or capital stock reserved for options, warrants, conversions, or other requirements have been properly disclosed.
Income Statement
ConditionIllustrative Example
There may be a loss from sales commitments.Provisions have been made for losses to be sustained in the fulfillment of or from inability to fulfill any sales commitments.
There may be losses from purchase commitments.Provisions have been made for losses to be sustained as a result of purchase commitments for inventory quantities in excess of normal requirements or at prices in excess of prevailing market prices.
Nature of the product or industry indicates the possibility of undisclosed sales terms.We have fully disclosed to you all sales terms, including all rights of return or price adjustments and all warranty provisions.

Appendix C - Illustrative Updating Management Representation Letter

.18        

1.    The following letter is presented for illustrative purposes only. It may be used in the circumstances described in paragraph .12 of this section. Management need not repeat all of the representations made in the previous representation letter.

2.    If matters exist that should be disclosed to the auditor, they should be indicated by listing them following the representation. For example, if an event subsequent to the date of the balance sheet has been disclosed in the financial statements, the final paragraph could be modified as follows: "To the best of our knowledge and belief, except as discussed in Note X to the financial statements, no events have occurred. . . ."

    [ Date ]

    To [ Auditor ]

    In connection with your audit(s) of the [ identification of financial statements ] of [ name of entity ] as of [ dates ] and for the [ periods ] for the purpose of expressing an opinion as to whether the [ consolidated ] financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of [ name of entity ] in conformity with accounting principles generally accepted in the United States of America, you were previously provided with a representation letter under date of [ date of previous representation letter ]. No information has come to our attention that would cause us to believe that any of those previous representations should be modified.

    To the best of our knowledge and belief, no events have occurred subsequent to [ date of latest balance sheet reported on by the auditor ] and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements.

    __________________________________________ [ Name of Chief Executive Officer and Title ]

    __________________________________________ [ Name of Chief Financial Officer and Title ]

[Revised, October 2000, to reflect conforming changes necessary due to the issuance of Statement on Auditing Standards No. 93.]

Footnotes (AS 2805 - Management Representations):

1 AS 1015, Due Professional Care in the Performance of Work , states, "The auditor neither assumes that management is dishonest nor assumes unquestioned honesty. In exercising professional skepticism, the auditor should not be satisfied with less than persuasive evidence because of a belief that management is honest."

2 An illustrative representation letter from management is contained in appendix A, "Illustrative Management Representation Letter" [paragraph .16].

3 Specific representations also are applicable to financial statements presented in conformity with a comprehensive basis of accounting other than generally accepted accounting principles. The specific representations to be obtained should be based on the nature and basis of presentation of the financial statements being audited.

4 AS 2810, Evaluating Audit Results, indicates that a misstatement can arise from error or fraud and also discusses the auditor's responsibilities for evaluating accumulated misstatements .

5 If management believes that certain of the identified items are not misstatements, management's belief may be acknowledged by adding to the representation, for example, "We do not agree that items XX and XX constitute misstatements because [description of reasons]." 

6 AS 2810.11 states that the auditor may designate an amount below which misstatements need not be accumulated. Similarly, the summary of uncorrected misstatements included in or attached to the representation letter need not include such misstatements. The summary should include sufficient information to provide management with an understanding of the nature, amount, and effect of the uncorrected misstatements. Similar items may be aggregated.

7 The communication to management of immaterial misstatements aggregated by the auditor does not constitute a communication pursuant to paragraph .17 of AS 2405, Illegal Acts by Clients , Section 10A of the Securities Exchange Act of 1934, or paragraphs .79 through .82 of AS 2401, Consideration of Fraud in a Financial Statement Audit . The auditor may have additional communication responsibilities pursuant to AS 2405, Section 10A of the Securities Exchange Act of 1934, or AS 2401.

[8] [Footnote deleted.]

9 See AS 2410.18. 

10 See AS 2405. 

11 See paragraph .05 d of AS 2505, Inquiry of a Client's Lawyer Concerning Litigation, Claims, and Assessments. If the entity has not consulted a lawyer regarding litigation, claims, and assessments, the auditor normally would rely on the review of internally available information and obtain a written representation by management regarding the lack of litigation, claims, and assessments; see auditing Interpretation No. 6, "Client Has Not Consulted a Lawyer" (paragraphs .15-.17 of AI 17, Inquiry of a Client's Lawyer Concerning Litigation, Claims, and Assessments: Auditing Interpretations of AS 2505 ) .

12 See AS 2505.05 b . 

13 See paragraph .12 of AS 2801, Subsequent Events , paragraph .10 of AS 4101, Responsibilities Regarding Filings Under Federal Securities Statutes , and paragraph .45, footnote 31 of AS 6101, Letters for Underwriters and Certain Other Requesting Parties . 

[14] [Footnote deleted.]

15 See paragraph .55 of AS 3105 , Departures from Unqualified Opinions and Other Reporting Circumstances .

16 See AS 4101.10. 

17 An illustrative updating management representation letter is contained in appendix C, "Illustrative Updating Management Representation Letter" [paragraph .18]. 

18 See AS 3105.05–.17. 

Footnotes (Appendix A - Illustrative Management Representation Letter):

1 If management believes that certain of the identified items are not misstatements, management's belief may be acknowledged by adding to the representation, for example, "We do not agree that items XX and XX constitute misstatements because [ description of reasons ]." 

2 In the circumstance discussed in footnote 11 of this section, this representation might be worded as follows:

    We are not aware of any pending or threatened litigation, claims, or assessments or unasserted claims or assessments that are required to be accrued or disclosed in the financial statements in accordance with Financial Accounting Standards Board Statement No. 5,  Accounting for Contingencies , and we have not consulted a lawyer concerning litigation, claims, or assessments.

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what is representation letter

Understanding the Representation Letter

Written by David T. Schwindt, CPA

What is a Representation Letter? As a Board member or manager of a community management company, you may be asked to sign a representation letter at the conclusion of an audit or a reviewed financial statement engagement.  Although the letter is from the Association/management company to the CPA, the CPA will generally draft the letter on behalf of the Association.   The letter includes certain assertions about the Association during the period covered by the financial statements.  Those assertions include but are not limited to the following:

  • The Association/management company has provided the CPA with all requested financial information.
  • The Association/management company has disclosed all related party transactions.
  • The Association/management company has disclosed all existing and potential litigation.
  • The Association/management company has disclosed any knowledge of fraud or financial irregularities.
  • The Association takes responsibility for the design and implementation of a system of internal controls.  These controls include but are not limited to safeguarding assets, approving transactions and minimizing the risk of someone perpetrating a theft of money or information and not being discovered in a reasonable amount of time. Although the Board is ultimately responsible for this activity, it is common that Boards rely upon the management company to assist in this responsibility.

In some instances, the management company may sign a different representation letter because the responsibilities are slightly different.

Why is the Representation Letter necessary? The American Institute of Certified Public Accounts has determined that those charged with governance (the board of directors and the community management company) should take responsibility for the assertions in the representation letter.  CPAs are mandated to obtain the signed representation letter before issuing the final financial statements.

Who should sign the representation letter? Most often, the Board Chair, Board Treasurer and community manager signs the letter.

When does the Representation Letter need to be signed? The letter needs to be signed at the end of the engagement generally after a draft of the financial statements are issued.  Schwindt & Co combines the representation letter with the management letter comments and proposed adjusting journal entries for ease of review.  When the signed document is received by our office, we are then able to issue the final financial statements.

Should a new Board member or community manager who was not involved with Association management or governance during the period under audit or review be hesitant about signing the representation letter? This is a common question and the answer is simple.  No!  The first paragraph of the representation states that whoever signs the letter does so based on the best knowledge and belief of the person signing.  This means that even though you may be new to the Board or management company, it is perfectly fine to sign the letter because you will only be asserting to issues that you have knowledge.  It is very common for Board members/managers to sign a representation letter even though they were not involved during the period being audited or reviewed.

  • Representation letters are normal and required before the issuance of audited/reviewed financial statements.
  • Board members are only asserting to issues that they are aware of and new board members and managers frequently are required to sign representation letters.
  • The Board Chair, Board Treasurer and community manager are generally required to sign the representation letter.

Questions regarding this article may be directed to David T. Schwindt, CPA at Schwindt & Co. (503) 227-1165.

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Accounting Insights

The Role of Management Representation Letters in Audits

Explore the significance of management representation letters in audits, their preparation process, and common misunderstandings in this insightful overview.

what is representation letter

Audits are a critical component of financial transparency and corporate governance. Within this process, management representation letters play an essential role that often goes unnoticed by those outside the accounting profession.

These documents serve as a written assertion from company management regarding the accuracy and completeness of information provided to auditors. Their importance cannot be overstated, as they underpin the trust and integrity of the entire audit process.

Purpose of Management Representation Letters

Management representation letters serve as a formal attestation from a company’s executives to the auditors, confirming the veracity of the financial statements and disclosures. These letters are a professional necessity, providing auditors with assurances that all relevant information has been disclosed. They are a testament to the management’s confidence in their financial reporting and their commitment to transparency.

The letters also support the auditor’s assessment of the risk of material misstatement in the financial statements. By obtaining written confirmations, auditors can reduce the extent of substantive testing required, which can streamline the audit process. This efficiency is beneficial for both the auditors and the company being audited, as it can lead to a more focused and timely audit.

Moreover, these letters can be a safeguard against potential disputes or legal issues that may arise post-audit. In instances where inaccuracies are discovered after the audit has been completed, the letter serves as a record that management had affirmed the completeness and accuracy of the information at the time of the audit. This can be particularly important in cases where financial statements are later found to be fraudulent or misleading.

Preparing a Management Representation Letter

The preparation of a management representation letter is a meticulous process that requires careful attention to detail and a comprehensive understanding of the company’s financial affairs. It is a collaborative effort between management and auditors to ensure that all significant information is accurately reflected.

Necessary Statements Identification

Identifying the necessary statements to be included in the management representation letter is a foundational step. These statements typically cover a range of areas such as the acknowledgment of responsibility for the fair presentation of financial statements in conformity with the applicable financial reporting framework, confirmation of the completeness of the information provided, and the disclosure of any subsequent events that may affect the financial statements. Management must also confirm that they have made the auditors aware of all known instances of fraud or suspected fraud affecting the company. The identification process is guided by professional auditing standards, such as those issued by the American Institute of Certified Public Accountants (AICPA) or the International Auditing and Assurance Standards Board (IAASB).

Information Completeness

Ensuring the completeness of information in the management representation letter is paramount. This involves a thorough review of the company’s financial records and disclosures to verify that all relevant information has been included. Management must confirm that all transactions have been recorded and are reflected in the financial statements. They must also attest to the appropriateness of the accounting policies applied and whether any unrecorded liabilities exist. This step is critical as it directly impacts the credibility of the financial statements and the audit’s outcome. The completeness of information also extends to the disclosure of any related party transactions and the effects of any uncorrected misstatements identified during the audit.

Review and Approval

The final step in preparing a management representation letter is the review and approval by the company’s top executives, typically the CEO and CFO. This review process is not merely a formality; it is an active examination to ensure that the letter accurately reflects the company’s financial position and that all statements can be substantiated. The approval signifies that management has taken ownership of the representations made within the letter. It is also an opportunity for management to discuss any concerns or clarifications with the auditors before the letter is finalized. The signed letter is then dated as of the last day of fieldwork, signifying that the representations are relevant and up-to-date with the findings of the audit.

Misconceptions About Representation Letters

A common misunderstanding about management representation letters is that they are a mere formality, a routine sign-off without substantial impact on the audit’s outcome. This view underestimates the letter’s function as a document that auditors rely upon for assurance beyond the financial data and records they examine. It is not simply a procedural step, but a declaration that can have legal implications for the signatories, particularly if it is later found that the information provided was knowingly false or misleading.

Another misconception is that the letter is solely for the benefit of the auditors. While it is true that auditors use these letters to corroborate information and reduce audit risk, the benefits extend to the management and the company as well. The process of preparing the letter encourages a comprehensive review of the company’s financial disclosures, which can lead to the identification and rectification of errors before the audit is finalized. This proactive approach can enhance the quality of financial reporting and potentially prevent future financial discrepancies.

There is also a belief that once the letter is signed and the audit is complete, the responsibilities of management in relation to the representations made are concluded. However, the representations have a lasting effect, as they are a testament to the financial condition of the company at the point of the audit. Should any issues arise from the period covered by the audit, the representations made can be scrutinized for their accuracy and completeness.

The Importance of the Going Concern Assumption in Financial Reporting and Analysis

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Understanding an Audit Letter of Representation (LOR)

Understanding an audit letter of representation

This article addresses the what, when, why, and who’s related to letters of representation for audits, specifically SOC audits.

What is a Letter of Representation?

A letter of representation (a.k.a., representation letter, rep. letter, LOR) in audit services is a form letter from the American Institute of Certified Public Accountants typically prepared by the external auditors on behalf of a company’s management that is signed by a member of executive leadership. By signing the letter of representation, the executive attests to the external auditor that all of the information submitted is accurate, and that all material information has been disclosed to the auditors. For a financial audit, that material would be the financial statements and internal controls over financial reports. In the context of a SOC 1  or SOC 2  examination, company representation letters allow the management of the company to not only confirm that all material information has been disclosed to the service auditors, but also to take responsibility for the presentation and accuracy of the assertion and description in the report and to confirm that the controls were designed and operating effectively during the period of the assessment.

As you can imagine, a letter of representation is an important piece of evidence in any audit. Management’s representations and attestations in the letter provide some assurance that the information provided during the examination is reliable to use in audit procedures and to base its opinion. Management’s attestation in the representation letters also shifts blame to management in the case that a control failure is missed during an audit or inaccuracies because information was not made available or disclosed to the service auditor.

The when, why, and who of the letter of representation

When is a Letter of Representation Prepared?

As it is a form letter, a letter of representation may be prepared at any point during a SOC 1 or SOC 2 examination. However, paragraph .54 of AT-C section 205 (SSAE 18) specifies that a representation letter must be dated as of the date of the service auditor’s report. The letter may be signed any time from the date of the report and the report is issued. However, because it is an important piece of evidence supporting an audit opinion, the letter of representation should be signed before the report is issued ( AICPA’s SOC 1 Guide 4.189).

Why is the Letter of Representation Important?

As noted earlier, the simple answer is that the letter of representation is required by the American Institute of Certified Public Accountants, the governing body for attestation services. If management refuses to provide the requested representations, the service auditor would consider it “a limitation on the scope of the examination sufficient to preclude an unmodified opinion and may be sufficient to cause the practitioner to withdraw from the engagement” (Paragraph .A64 of AT-C section 205 ). Similar actions would be taken should the service auditor conclude that there is sufficient doubt about the competence, integrity, ethical values, or diligence of those providing the written representations; or the service auditor concludes that the written representations are otherwise not reliable and is unable to resolve the concerns through additional procedures. From a practical standpoint, because management’s written representations are an important consideration when forming the service auditor’s opinion, the service auditor would not ordinarily be able to issue the report until the service auditor had received the representation letter.

Who is Responsible for the Letter of Representation?

The AICPA’s guidance requires, when the engagement covers a modified or extended period, that the auditor obtain management’s written representation in the form of a representation letter addressed to the auditor. The AICPA requires that the service auditor request the written representations from management.

Letter of representation contents and requirements

What are the Contents of a Letter of Representation in Auditing?

Paragraph .38 of AT-C section 320 (SSAE 18) states that “the service auditor to request from management written representations required by paragraph .50 of AT-C section 205 as well as those required by paragraph .36 of AT-C section 320 .” The auditor and management may add additional representations to the letter. The written representations required by paragraph .50 of AT-C section 205 are identified in items a-i and the written representations required by paragraph .36 of AT-C section 320 in items j-k.

The following summarizes the minimal representations to be included in the letter:

A. Include the management’s assertion about the description, controls, control objectives (SOC 1), and trust services criteria (SOC 2) based on the criteria.

B. A statement that all relevant matters are reflected in the description or evaluation of the related controls or assertion.

C. A statement that all known matters contradicting the control objectives, trust services criteria, or assertion and any communications from regulatory agencies or others affecting the control objectives, trust services criteria, or assertion have been disclosed to the practitioner, including any communications between the end of the period addressed and the written assertion and the date of the service auditor’s report.

D. Acknowledge responsibility for:

  • the description in the report and the assertion:
  • selecting the applicable criteria; and
  • determining that the applicable criteria is appropriate.

E. A statement that any events after to the period (or point in time) related to the description, control objectives, or trust services criteria being reported on, which would have a material effect on the control objectives, trust services criteria, or assertion, have been disclosed to the auditor.

F. A statement that the individual signing and the company have provided the service auditor with all relevant information and access.

G. When applicable, a statement that the individual signing believes the effects of uncorrected misstatements are immaterial, when considered individually and in aggregate, to the control objectives or trust services criteria.

H. When applicable, a statement that significant assumptions used to make any material estimates are reasonable.

I. A statement that the individual signing and the company have disclosed the following to the service auditor:

  • Any and all deficiencies in internal control relevant to the engagement of which the responsible party is aware;
  • Knowledge of any actual, suspected, or alleged fraud or violation of laws or regulations affecting the control objectives or trust services criteria; and
  • Other matters as the service auditor deems appropriate.

J. A statement that any instances of noncompliance with laws and regulations or uncorrected misstatements attributable to the service organization that may affect one or more user entities have been disclosed to the service auditor.

K. A statement that any knowledge of actual, suspected, or alleged fraud by the management or employees of the service organization that could adversely affect the fairness of the presentation of management’s description of the service organization’s system or the completeness or achievement of the control objectives stated in the description have been disclosed to the service auditor.

An audit letter of representation is a form letter prepared by a company’s service auditor and signed by a member of senior management. In the letter, management attests to the accuracy and completeness of the information provided to the service auditors for their analysis. The letter must be dated as of the date of the report and signed on or after that date. The service auditor must obtain a signed representation letter that includes, at a minimum, the required representations specified by the AICPA in order to opine an audit.

what is representation letter

Isaac Clarke is a partner at Linford & Co., LLP. He began his career with Ernst & Young in 2003 where he developed his audit expertise over a number of years. Isaac specializes in and has conducted numerous SOC 1 and SOC 2 examinations for a variety of companies—from startups to Fortune 100 companies. Isaac enjoys helping his clients understand and simplify their compliance activities. He is attentive to his clients’ needs and works meticulously to ensure that each examination and report meets professional standards.

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What is a Letter of Representation in Auditing

What is a Letter of Representation in Auditing?

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Do you know what is a Letter of Representation in auditing? It is an essential document in the auditing process. This letter is signed by an executive leader and is usually written by external auditors on behalf of the organization’s management.

The Letter of Representation (LOR) is known by different names, such as:

  • Representation letter

Importance of an LOR

The LOR provides reassurance that the information presented is accurate, making it essential evidence in any audit. Management’s attestations in the LOR show that the business has revealed all pertinent information, helping to create a foundation of confidence.

This places more responsibility on management in the case of errors or control breakdowns, particularly if relevant data is withheld from the auditors.

Who Prepares the Letter of Representation?

The auditor prepares the rep letter, which the manager signs. The executive then verifies that the information given is true and that all relevant information has been shared with the auditors by signing the LOR.

Key Elements of a Rep Letter

The LOR is crucial in financial audits regarding financial statements and internal controls that regulate financial reporting. Within the framework of SOC 1 or SOC 2 audits, the LOR allows the organization’s management to confirm that service auditors have been provided with all relevant information.

In addition, the rep letter confirms that controls were successfully implemented and maintained during the evaluation period. It holds management accountable for the veracity of the report’s claims and descriptions.

Timing of a Letter of Representation

LOR can be created at any time during a SOC 1 or SOC 2 test. However, the rep letter needs to be dated as of the service auditor’s report date under AT-C section 205 (SSAE 18), paragraph 2.54.

The time between the report’s date of issuance and its signing is appropriate. However, in order to properly support the audit opinion, it must be signed prior to the report’s publication.

Responsibility and Contents of a Letter of Representation

Management is in charge of the LOR. They have to give the auditor written justifications. Claims made in these representations are:

  • Description, controls, and control goals (SOC 1)
  • Trust services requirements (SOC 2)

These are covered in full in paragraph 38 of AT-C section 320 (SSAE 18).

Click here to read about the IRS & state audit representation .

Crucial Statements in a Representation Letter

The following minimum representations have to be included in a LOR:

Management’s Assertions

The assertions made by management verify the criteria, controls, and descriptions.

Relevance and Disclosure

Declaring that the description or evaluation takes into account all pertinent information.

Responsibility Acknowledgement

Accepting accountability for the criteria used, the description, and its appropriateness.

Post-Period Events

Report any noteworthy occurrences beyond the reporting period.

Access and Information

Attesting to the fact that the auditor has been granted access to all pertinent information.

Material Misstatements and Assumptions

Expressing acknowledgment for any minor errors in information as well as the validity of critical presumptions.

Internal Control Deficiencies

Identifying and disclosing any known weaknesses in internal controls is critical.

Fraud and Compliance

Reporting any suspected fraud or legal non-compliance.

The Bottom Line

Learning what is a letter of representation in auditing offers confirmation from management on the completeness and correctness of the data provided to auditors. In accordance with auditing requirements, the LOR needs to be dated, signed, and contain particular representations before the audit report is released. This agreement guarantees accountability and supports the integrity of the auditing process.

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What is the management representation letter?

Introduction, related posts, how to prepare an internal audit program tips and guidance, review engagement (limited assurance): definition and example, 5 types of due diligence services, benefits, and limitations, what is internal audit department (responsibilities and more).

Management Representation Letter: Format, Content, Signature

Home » Bookkeeping » Management Representation Letter: Format, Content, Signature

As of 2019, the FASB requires publicly traded companies to prepare financial statements following the Generally Accepted Accounting Principles (GAAP). Auditors are required by professional standards to report, in writing, internal control matters that they believe should be brought to the attention of those charged with governance (the board). Generally, if your auditor is going to put an internal control matter in a letter, they have assessed that the matter was the result of a deficiency in internal controls. This is an important part of that audit that the profession does not take lightly.

One common example of a deficiency in internal control that’s severe enough to be considered a material weakness or significant deficiency is when an organization lacks the knowledge and training to prepare its own financial statements, including footnote disclosures. The “SAS 115” letter is usually issued when any significant deficiencies or material weaknesses would have been discussed with management during the audit, but are not required to be communicated in written form. In performing an audit of your Plan’s internal controls and plan financials, your auditors are required to obtain an understanding of the Plan’s operations and internal controls.

A management representation letter is a form letter written by a company’s external auditors, which is signed by senior company management. The letter attests to the accuracy of the financial statements that the company has submitted to the auditors for their analysis. The CEO and the most senior accounting person (such as the CFO) are usually required to sign the letter. The letter is signed following the completion of audit fieldwork, and before the financial statements are issued along with the auditor’s opinion. External auditors follow a set of standards different from that of the company or organization hiring them to do the work.

In doing so, they may become aware of matters related to your Plan’s internal control that may be considered deficiencies, significant deficiencies, or material weaknesses. Audits performed by outside parties can be extremely helpful in removing any bias in reviewing the state of a company’s financials. Financial audits seek to identify if there are any material misstatements in the financial statements. An unqualified, or clean, auditor’s opinion provides financial statement users with confidence that the financials are both accurate and complete. External audits, therefore, allow stakeholders to make better, more informed decisions related to the company being audited.

The representation should reaffirm your client’s understanding of all significant terms in the engagement letter. A relevant assertion is a financial statement assertion that has a reasonable possibility of containing a misstatement or misstatements that would cause the financial statements to be materially misstated.

The purpose of an internal audit is to ensure compliance with laws and regulations and to help maintain accurate and timely financial reporting and data collection. It also provides a benefit to management by identifying flaws in internal control or financial reporting prior to its review by external auditors.

Depending on materiality and other qualitative factors, the auditors will consider the deficiency to be an “other” matter, significant deficiency, or material weakness. The auditor has discretion on which category the deficiency falls into, but are otherwise required to use the standard wording and definitions in the letter.

It serves to document management’s representations during the audit, reducing misunderstandings of management’s responsibilities for the financial statements. The definition of good internal controls is that they allow errors and other misstatements to be prevented or detected and corrected by (the nonprofit’s) employees in the normal course of performing their duties.

management representation letter

Material weaknesses or significant deficiencies may exist that were not identified during the audit, and auditors are required to disclose this in their written communication. The auditor’s report contains the auditor’s opinion on whether a company’s financial statements comply with accounting standards. The results of the internal audit are used to make managerial changes and improvements to internal controls.

What is a management representation letter?

A management representation letter is a form letter written by a company’s external auditors, which is signed by senior company management. The letter attests to the accuracy of the financial statements that the company has submitted to the auditors for their analysis.

A control objective provides a specific target against which to evaluate the effectiveness of controls. Management representation is a letter issued by a client to the auditor in writing as part of audit evidences. The representations letter must cover all periods encompassed by the audit report, and must be dated the same date of audit work completion.

These types of auditors are used when an organization doesn’t have the in-house resources to audit certain parts of their own operations. The assertion of completeness is an assertion that the financial statements are thorough and include every item that should be included in the statement for a given accounting period. The assertion of completeness also states that a company’s entire inventory, even inventory that may be temporarily in the possession of a third party, is included in the total inventory figure appearing on a financial statement. The compilation standards do not require practitioners to obtain a management representation letter, but this does not mean that it’s not a prudent thing to do. Obtaining a representation letter helps to ensure your client understands the services that you have provided, the limitations on the work you have completed, and that they are ultimately responsible for their financial statements.

The biggest difference between an internal and external audit is the concept of independence of the external auditor. When audits are performed by third parties, the resulting auditor’s opinion expressed on items being audited (a company’s financials, internal controls, or a system) can be candid and honest without it affecting daily work relationships within the company. Auditors evaluate each internal control deficiency noted during the audit to determine whether the deficiency, or a combination of deficiencies, is severe enough to be considered a material weakness or significant deficiency. In assessing the deficiency, auditors consider the magnitude of potential misstatements of your financial statements as well as the likelihood that internal controls would not prevent or detect and correct the misstatements.

Representation to Management

  • In an audit of financial statements, professional standards require that auditors obtain an understanding of internal controls to the extent necessary to plan the audit.
  • written confirmation from management to the auditor about the fairness of various financial statement elements.
  • Auditors use this understanding of internal controls to assess the risk of material misstatement of the financial statements and to design appropriate audit procedures to minimize that risk.

The idea behind a management representation letter is to take away some of the legal burdens of delivering wrong financial statements from the auditor to the company. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Internal auditors are employed by the company or organization for whom they are performing an audit, and the resulting audit report is given directly to management and the board of directors. Consultant auditors, while not employed internally, use the standards of the company they are auditing as opposed to a separate set of standards.

If the auditors detect an unexpected material misstatement during your audit, it could indicate that your internal controls are not functioning properly. Conversely, lack of an actual misstatement doesn’t necessarily mean that your internal controls are working.

The determination of whether an assertion is a relevant assertion is based on inherent risk, without regard to the effect of controls. Financial statements and related disclosures refers to a company’s financial statements and notes to the financial statements as presented in accordance with generally accepted accounting principles (“GAAP”). References to financial statements and related disclosures do not extend to the preparation of management’s discussion and analysis or other similar financial information presented outside a company’s GAAP-basis financial statements and notes.

External audits can include a review of both financial statements and a company’s internal controls. When a company’s financial statements are audited, the principal element an auditor reviews is the reliability of the financial statement assertions. In the United States, the Financial Accounting Standards Board (FASB) establishes the accounting standards that companies must follow when preparing their financial statements.

In an audit of financial statements, professional standards require that auditors obtain an understanding of internal controls to the extent necessary to plan the audit. Auditors use this understanding of internal controls to assess the risk of material misstatement of the financial statements and to design appropriate audit procedures to minimize that risk. written confirmation from management to the auditor about the fairness of various financial statement elements. The purpose of the letter is to emphasize that the financial statements are management’s representations, and thus management has the primary responsibility for their accuracy.

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This letter is useful for setting the expectations of both parties to the arrangement. Almost all companies receive a yearly audit of their financial statements, such as the income statement, balance sheet, and cash flow statement. Lenders often require the results of an external audit annually as part of their debt covenants. For some companies, audits are a legal requirement due to the compelling incentives to intentionally misstate financial information in an attempt to commit fraud.

Management representation letter

As long as there’s a reasonable possibility for material misstatement of account balances or financial statement disclosures, your internal controls are considered to be deficient. An auditor typically will not issue an opinion on a company’s financial statements without first receiving a signed management representation letter. An audit engagement is an arrangement that an auditor has with a client to perform an audit of the client’s accounting records and financial statements. The term usually applies to the contractual arrangement between the two parties, rather than the full set of auditing tasks that the auditor will perform. To create an engagement, the two parties meet to discuss the services needed by the client.

As a result of the Sarbanes-Oxley Act (SOX) of 2002, publicly traded companies must also receive an evaluation of the effectiveness of their internal controls. As noted above, an internal control letter is usually the result of a deficiency in internal controls discovered during the audit, most commonly from a material audit adjustment. The letter includes required language regarding the severity of the deficiency.

Real Business Owners,

The parties then agree on the services to be provided, along with a price and the period during which the audit will be conducted. This information is stated in an engagement letter, which is prepared by the auditor and sent to the client. If the client agrees with the terms of the letter, a person authorized to do so signs the letter and returns a copy to the auditor. By doing so, the parties indicate that an audit engagement has been initiated.

Also, the letter provides supplementary audit evidence of an internal nature by giving formal management replies to auditor questions regarding matters that did not come to the auditor’s attention in performing audit procedures. Some auditors request written representations of all financial statement items. All auditors require representations regarding receivables, inventories, plant and equipment, liabilities, and subsequent events. The letter is required at the completion of the audit fieldwork and prior to issuance of the financial statements with the auditor’s opinion.

Auditors spend a lot of time assessing how material audit adjustments and immaterial adjustments that have the potential to be material will be communicated in the internal control letter. The Representation Letter is issued with the draft audit and is required by auditing standards to finalize the audit. The Representation Letter is a letter from the Association to our firm confirming responsibilities of the board and management for the financial statements, as well as confirming information provided to us during the audit. The President or Treasurer and Management need to sign the Representation Letter and return it back to our office within 60 days from the date the draft audit was issued. Representation Letters received after the 60-day mark may result in additional auditing procedures in order to finalize the audit and comply with auditing standards at an additional expense to the Association.

management representation letter

what is representation letter

Your Ask Joey ™ Answer

what is representation letter

What is a management representation letter?

A “rep” letter is the audit teams’ formal evidence that management understands their responsibilities and that management has performed all of their responsibilities.

what is representation letter

Management should provide the auditor with a representation letter in writing that outlines the following characteristics:

A) Managements acceptance for its responsibility in the establishment and maintenance of an effective internal control systems.

B) Managements performance of its assessment of the effectiveness of its internal control systems.

C) A statement of management’s assessment and the criteria that has been used and implemented as of a specified period in time.

D) A statement that management has disclosed all deficiencies both in design and operation of its system of internal controls.

E) A statement that management confirms that all significant deficiencies and material weaknesses have been disclosed to the independent external auditor.

F) A statement the management confirms whether or not previously identified deficiencies have been resolved or remain unresolved.

G) Illustrates all fraudulent activities that result in material misstatements specifically involving senior management or other employees that have a significant role in ICFR.

H) Illustrates whether or not there are any significant changes to internal controls after the “as of” date of the report as well as any corrective action that has been taken by management in regard to significant deficiencies and material weaknesses that have been identified.

I) Any failure to obtain written representations for management will result in scope limitations which might include the auditor’s withdrawal from the engagement altogether.

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How to Choose the Best Amazon PPC Agency for Your Brand

As an Amazon seller, mastering Pay-Per-Click (PPC) advertising is crucial for success. However, managing PPC campaigns can be complex and time-consuming. This is where an Amazon PPC agency can help. But with so many options available, how do you choose the right one for your brand? This article will guide you through the process of selecting the best Amazon PPC agency to boost your sales and grow your business. Understanding Amazon PPC Amazon PPC is an advertising model where sellers pay a fee each time a shopper clicks on their ad. These ads appear in various places on Amazon, including search results and product detail pages. Effective PPC campaigns can increase visibility, drive traffic to your listings, and boost sales. Partnering with a reputable Amazon agency can further enhance your PPC strategy, ensuring your campaigns are optimised for maximum performance and return on investment. Why Consider an Amazon PPC Agency? Key Factors to Consider When Choosing an Amazon PPC Agency 1. Experience and Expertise Look for an agency with a proven track record in Amazon PPC. Consider: – How long have they been managing Amazon PPC campaigns? – Do they have experience in your product category? – Can they provide case studies or success stories? Ask about their team’s qualifications and certifications. A good agency should have Amazon Advertising-certified professionals. 2. Services Offered Different agencies offer various services. Some common offerings include: – Keyword research and optimization – Campaign structure and setup – Bid management – Performance tracking and reporting – A/B testing – Product listing optimization Ensure the agency’s services align with your needs and goals. 3. Technology and Tools Ask about the tools and software the agency uses. Advanced PPC management tools can provide valuable insights and automate certain tasks, leading to better results. 4. Transparency and Reporting Choose an agency that provides regular, detailed reports on your campaigns’ performance. They should be able to explain their strategies and results clearly. Look for: – Frequency of reporting – Key performance indicators (KPIs) they track – How they communicate results and strategy adjustments 5. Pricing Structure Understand how the agency charges for its services. Common pricing models include: – Percentage of ad spend – Flat monthly fee – Performance-based pricing Consider which model aligns best with your budget and goals. 6. Client Communication Effective communication is crucial for a successful partnership. Ask about: – Your primary point of contact – Frequency of check-ins or meetings – Response times for queries or concerns 7. Scalability As your business grows, your PPC needs may change. Choose an agency that can scale its services to match your growth. 8. Industry Knowledge An agency with experience in your specific product category can provide valuable insights and strategies tailored to your niche. 9. Client References Ask for references from current or past clients. Speaking with other sellers can give you valuable insights into working with the agency. 10. Contract Terms Carefully review the contract terms, including: – Contract length – Cancellation policy – Performance guarantees (if any) – Ownership of account and data Steps to Choose Your Amazon PPC Agency 1. Define Your Goals: Clearly outline what you want to achieve with PPC advertising. 2. Research: Create a list of potential agencies based on recommendations, online searches, and industry forums. 3. Initial Screening: Review each agency’s website, case studies, and client testimonials. 4. Request Proposals: Contact your shortlisted agencies and request detailed proposals. 5. Evaluate Proposals: Compare the proposals based on the factors discussed earlier. 6. Interviews: Conduct interviews with your top choices to gauge their expertise and communication style. 7. Check References: Speak with current or former clients of the agencies you’re considering. 8. Trial Period: If possible, negotiate a trial period to test the agency’s services before committing long-term. 9. Make Your Decision: Choose the agency that best aligns with your needs, goals, and budget. 10. Set Expectations: Clearly communicate your expectations and goals to the chosen agency. Conclusion Choosing the right Amazon PPC agency can significantly impact your brand’s success on the platform. For top-notch service and results, check out Amazowl, an experienced full-service Amazon agency that exists to allow our clients to go beyondthe present and conquer the future. By considering factors like experience, services offered, technology used, and communication style, you can find an agency that aligns with your goals and helps drive your Amazon business forward.

A Taste of Luxury the WonderDays Corrigan’s Mayfair Two-Course Dinner

Discerning gourmands, rejoice! The WonderDays Corrigan’s Mayfair Two-Course Dinner offers a tantalizing invitation to a culinary adventure unlike any other. Nestled in the heart of London’s prestigious Mayfair district, this experience grants you access to Corrigan’s Mayfair, the Michelin-starred haven helmed by the award-winning Chef Richard Corrigan. Forget Youtube recipe tours – this guide delves into everything you need to know to embark on a journey through meticulously crafted dishes, exceptional service, and a sophisticated ambiance. A Symphony for the Senses: What Awaits at Corrigan’s Mayfair The WonderDays Corrigan’s Mayfair Two-Course Dinner provides a delectable introduction to Chef Corrigan’s artistry, ensuring a truly memorable evening: Two-Course Culinary Journey: Savor a masterfully crafted two-course meal showcasing Chef Corrigan’s signature style. Expect a focus on classic European cuisine with a modern twist, featuring seasonal and high-quality ingredients. Online reviews hint at tantalizing options – think succulent steaks, roasted meats, fresh seafood creations, and even vegetarian alternatives, all presented with an artistic flair. Optional Wine Pairing (Uncork New Flavors): Elevate your dining experience to new heights with an optional wine pairing. Corrigan’s Mayfair boasts an extensive wine list, and their knowledgeable staff can recommend the perfect pairings to complement your chosen dishes, further enhancing the flavor profile with every bite. Michelin-Starred Ambiance: Step into a world of refined elegance. Corrigan’s Mayfair provides a sophisticated backdrop, perfect for a romantic occasion, a celebratory dinner with friends, or simply an evening of luxurious indulgence. Impeccable Service: The wait staff at Corrigan’s Mayfair is renowned for their attentiveness and dedication to providing an exceptional dining experience. They’ll answer your questions about the menu, explain the intricacies of each dish, and ensure your evening runs smoothly, allowing you to fully focus on savoring the moment. Important Notes: While the WonderDays voucher Mercedes GT Supercar Driving Experience covers the two-course meal, it typically doesn’t include additional beverages beyond water or gratuity for the wait staff. Always clarify these details with the restaurant when making your reservation. Booking and Availability: Securing Your Spot at Corrigan’s Mayfair While WonderDays offers vouchers for this exquisite experience, securing a table requires additional steps: Reservations: After purchasing your WonderDays voucher, make a reservation directly with Corrigan’s Mayfair to confirm their participation in the WonderDays program and secure your table. Availability can fluctuate, especially during peak seasons or weekends, so plan ahead. Voucher Validity: WonderDays vouchers typically have a validity period, so ensure you redeem them within the designated timeframe to enjoy your Michelin-starred experience. Dietary Requirements: Corrigan’s Mayfair strives to accommodate dietary restrictions whenever possible. It’s always best to contact the restaurant directly well in advance of your reservation to inquire about vegetarian, gluten-free, or other specific dietary needs. Frequently Asked Questions (FAQs) about the WonderDays Corrigan’s Mayfair Two-Course Dinner What’s the dress code? The dress code leans towards smart casual elegance. Opt for dressy jeans or trousers paired with a stylish top or dress. Can I customize the two-course menu? While the menu might offer some choices for each course, extensive customization might not be possible. However, contacting the restaurant directly to inquire about dietary restrictions is highly recommended. Is parking available? Limited valet parking is available at an additional cost. Consider alternative transportation options like taxis, ride-sharing services, or public transportation to avoid parking hassles. Elevate Your Experience: Making Memories at Corrigan’s Mayfair The WonderDays Corrigan’s Mayfair Two-Course Dinner offers a delightful foundation, but there’s more you can do to elevate your evening and create lasting memories: Plan Your Night: Research Corrigan’s Mayfair website or reviews to get a sense of the restaurant’s ambiance and Chef Corrigan’s culinary style. This can help you anticipate potential menu choices and prepare for an evening of exquisite flavors. Arrive Early: Consider arriving early to explore the surrounding Mayfair district, known for its luxurious shops  Consider a Special Occasion: The WonderDays Corrigan’s Mayfair Two-Course Dinner is perfect for celebrating a birthday, anniversary, or any other special occasion. Inform the restaurant in advance if you’re celebrating, as they might be able to offer a special touch, like a complimentary dessert or a table with a desirable location. Beyond the Two Courses: Exploring Corrigan’s Mayfair While the WonderDays voucher focuses on the two-course meal, Corrigan’s Mayfair offers a wider selection of culinary delights: A La Carte Menu: Explore the full a la carte menu, featuring a wider range of Chef Corrigan’s signature dishes, including starters, additional main courses, and decadent desserts. Corrigan’s Mayfair offers a delightful spread of finger sandwiches, scones, pastries, and a selection of teas, perfect for a relaxed afternoon treat. Bar & Cocktails: For a pre-dinner drink or a nightcap, explore the well-stocked bar. The bartenders can craft classic cocktails or recommend the perfect wine pairing to complement your meal further.

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A formal written record of representations made by the management of an organization to the auditors. The letter is prepared by the auditor and signed by management on a date as near as possible to the date of the auditors’ report and after all audit work has been completed, including the review of events occurring after the balance sheet date, for example. The information referred to in the letter is material to the financial statements for which the auditor is unable to obtain independent corroborative evidence. These matters might include any future legal claims and adjusting events.

From:   letter of representation   in  A Dictionary of Accounting »

Subjects: Social sciences — Business and Management

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Demystifying ISA 580: Management Representation Letters in Auditing

Introduction: The Basics of Audit – Management Representation Letter (ISA 580)

In the intricate world of auditing, there exists a pivotal document known as the Management Representation Letter, guided by ISA 580. This document plays a central role in audits, acting as a conduit for communication between management and auditors. In this comprehensive exploration, we delve deep into the intricacies of the Management Representation Letter, covering all 19 key points outlined in the standard, from its purpose to the actions auditors must take in the face of challenges.

Detailed Analysis:

1. Understanding the Management Representation Letter

A Management Representation Letter, as stipulated by ISA 580, constitutes a formal statement presented by the management of the audited entity to the auditors. It can be furnished either spontaneously or in response to specific audit inquiries. These representations encompass a wide spectrum of subjects, ranging from general responsibilities related to the preparation of financial statements to specific assertions concerning items within the financial statements.

2. The Role of Management Representation as Audit Evidence

While Management Representation Letters hold undeniable importance, they cannot serve as a complete replacement for other audit evidence that auditors anticipate will be available. For select matters where no alternative evidence exists, such as determining whether investments are held as short-term or long-term, Management Representation can indeed function as sufficient and appropriate audit evidence.

3. Key ISA 580 Requirements

Revised ISA 580 introduces two significant stipulations:

  • 3.1. In the event that a representation made by management contradicts other audit evidence, auditors are obligated to investigate the circumstances thoroughly and, if necessary, reassess the reliability of other representations provided by management.
  • 3.2. If, during the course of the audit, management refuses to furnish a representation that auditors deem essential, this constitutes a scope limitation. Consequently, auditors are required to express a qualified opinion or a disclaimer of opinion.

Representation Letters in Auditing

4. Additional Vital Elements of Management Representation

  • 4.1. The Management Representation Letter must be addressed directly to the auditor.
  • 4.2. Its date should coincide with the date of the auditor’s report or precede it.
  • 4.3. It should bear the signature of a member of management who bears primary responsibility for the preparation of financial statements and possesses pertinent knowledge in this regard.

5. Various Forms of Written Representation

Management Representation can assume various formats, including:

  • 5.1. A straightforward representation provided by management.
  • 5.2. A letter authored by auditors delineating their understanding of management’s representation, an acknowledgment of which is sought and obtained from management.
  • 5.3. A duly authenticated copy of pertinent meetings involving the board of directors or analogous bodies.

6. The Effective Date of ISA 580

ISA 580 is effective for audits of financial statements for periods beginning on or after 1st April, 2009.

7. The Objectives of the Auditor

The objectives of the auditor, as per ISA 580, encompass:

  • 7.1. Obtaining written representations from management and, where appropriate, those charged with governance, confirming their belief in fulfilling their responsibility for preparing the financial statements and ensuring the completeness of information provided to the auditor.
  • 7.2. Supporting other audit evidence relevant to the financial statements or specific assertions in the financial statements through written representations, as determined necessary by the auditor or required by other SAs.
  • 7.3. Responding appropriately to written representations provided by management and, where appropriate, those charged with governance, or if management or, where appropriate, those charged with governance do not provide the written representations requested by the auditor.

8. Definition of Written Representations

For purposes of the SAs, “Written representations” is defined as a written statement by management provided to the auditor to confirm certain matters or to support other audit evidence. Written representations, in this context, do not include financial statements, the assertions therein, or supporting books and records.

9. References to “Management” in the Standard

For purposes of this SA, references to “management” should be read as “management and, where appropriate, those charged with governance.” In the case of a fair presentation framework, management is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework; or the preparation of financial statements that give a true and fair view in accordance with the applicable financial reporting framework.

10. Management from Whom Written Representations Requested

The auditor shall request written representations from management with appropriate responsibilities for the financial statements and knowledge of the matters concerned.

11. Written Representations about Management’s Responsibilities for the Preparation of the Financial Statements

The auditor shall request management to provide a written representation that it has fulfilled its responsibility for the preparation of the financial statements in accordance with the applicable financial reporting framework, including where relevant their fair presentation, as set out in the terms of the audit engagement.

12. Written Representations about Information Provided and Completeness of Transactions

The auditor shall request management to provide a written representation that:

  • 12.1. It has provided the auditor with all relevant information and access as agreed in the terms of the audit engagement.
  • 12.2. All transactions have been recorded and are reflected in the financial statements.

13. Description of Management’s Responsibilities in the Written Representations

Management’s responsibilities shall be described in the written representations required by paragraphs 9 and 10 in the manner in which these responsibilities are described in the terms of the audit engagement.

14. Other Written Representations

Other SAs may require the auditor to request written representations. If, in addition to such required representations, the auditor determines that it is necessary to obtain one or more written representations to support other audit evidence relevant to the financial statements or one or more specific assertions in the financial statements, the auditor shall request such other written representations.

15. Date of and Period(s) Covered by Written Representations

The date of the written representations shall be as near as practicable to, but not after, the date of the auditor’s report on the financial statements. The written representations shall be for all financial statements and period(s) referred to in the auditor’s report.

16. Form of Written Representations

The written representations shall be in the form of a representation letter addressed to the auditor. If law or regulation requires management to make written public statements about its responsibilities, and the auditor determines that such statements provide some or all of the representations required by paragraphs 9 or 10, the relevant matters covered by such statements need not be included in the representation letter.

17. Doubt as to the Reliability of Written Representations and Requested Written Representations Not Provided

  • 17.1. If the auditor has concerns about the competence, integrity, ethical values, or diligence of management, or about its commitment to or enforcement of these, the auditor shall determine the effect that such concerns may have on the reliability of representations (oral or written) and audit evidence in general.
  • 17.2. In particular, if written representations are inconsistent with other audit evidence, the auditor shall perform audit procedures to attempt to resolve the matter. If the matter remains unresolved, the auditor shall reconsider the assessment of the competence, integrity, ethical values, or diligence of management, or of its commitment to or enforcement of these, and shall determine the effect that this may have on the reliability of representations (oral or written) and audit evidence in general.

18. Requested Written Representations Not Provided

If management does not provide one or more of the requested written representations, the auditor shall:

  • 18.1. Discuss the matter with management.
  • 18.2. Re-evaluate the integrity of management and evaluate the effect that this may have on the reliability of representations (oral or written) and audit evidence in general.
  • 18.3. Take appropriate actions, including determining the possible effect on the opinion in the auditor’s report in accordance with SA 705, having regard to the requirement in paragraph 19 of this SA.

19. Written Representations about Management’s Responsibilities

The auditor shall disclaim an opinion on the financial statements in accordance with SA 705 if:

  • 19.1. The auditor concludes that there is sufficient doubt about the integrity of management such that the written representations required by paragraphs 9 and 10 are not reliable; or
  • 19.2. Management does not provide the written representations required by paragraphs 9 and 10.

Conclusion: Unlocking the Significance of ISA 580

In conclusion, ISA 580, which revolves around the Management Representation Letter, is a comprehensive framework that ensures transparency, accountability, and reliability in the audit process. By covering all 19 points detailed in the standard, auditors can effectively navigate the complexities of this critical document. Understanding the nuances of ISA 580 empowers auditors to fulfill their duties with precision, integrity, and professionalism, ultimately enhancing the quality of financial reporting and instilling confidence in stakeholders.

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15+ Examples | Representation Letter Format, Wording Ideas

  • Letter Format
  • March 14, 2024
  • Office Letters , Request Letters

Representation Letter Format: A representation letter format is a document that is prepared by an individual or organization and sent to another party . It is a written statement that provides assurance to the recipient that certain facts are true and accurate . This article will discuss the representation letter format and its importance.

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A representation Office letter format is a written statement or document that a company’s management or board of directors provides to their external auditors to confirm the accuracy and completeness of the information they have presented to them. The representation letter format serves as a crucial component of an audit and is often requested by the auditors as part of their audit procedures .

Representation Letter Format Writing Tips

Content in this article

The representation letter format is a formal document that follows a specific format to ensure that all necessary information is included. The format of the Request letter typically consists of several sections, each addressing a different aspect of the audit. The following is a general outline of the standard representation letter format:

The format of a representation letter format typically includes the following:

  • Header: The Request letter should start with a header that includes the date, recipient’s name, and address.
  • Introduction: The first paragraph of the letter should introduce the purpose of the letter and the relationship between the sender and the recipient.
  • Scope: The second paragraph of the letter should define the scope of the representation. This may include the time period covered by the representation, the specific areas that will be covered, and any limitations that may apply.
  • Representation: The third paragraph of the letter should provide a representation statement. This statement should indicate that the information provided is true and accurate to the best of the sender’s knowledge.
  • Signature: The letter should end with the sender’s signature, printed name, and contact information.

The representation letter format is important because it provides assurance to the recipient that the information provided is accurate and complete. It can be used in a variety of situations, such as during an audit, as part of a due diligence review, or in a legal proceeding .

The Representation Letter Format can also be used to limit the liability of the sender . By providing a representation statement, the sender is indicating that they have done their due diligence and that the information provided is accurate. If it later turns out that the information was not accurate, the sender may be able to use the representation letter as a defense.

Representation Letter Format – Sample Format

Below is a Sample Format of Representation Letter Format:

[Your Name]

[Your Title/Position]

[Your Company Name]

[Company Address]

[City, State, Zip Code]

[Recipient’s Name]

[Recipient’s Title/Position]

[Recipient’s Company Name]

Subject: Representation Letter

Dear [Recipient’s Name],

I am writing this letter on behalf of [Your Company Name] to officially confirm certain representations made during our discussions/negotiations/meetings related to [Specify the context of representations, e.g., a business transaction, partnership, agreement, etc.].

Details of Representations: [List the specific representations made, ensuring clarity and accuracy. Include relevant dates, figures, and terms.]

[Provide additional details or explanations as necessary.]

Confirmation of Accuracy: I hereby confirm that, to the best of my knowledge, the representations mentioned above are accurate and complete. I acknowledge the importance of these representations in the context of our [transaction/agreement/partnership], and I assure you that [Your Company Name] is committed to fulfilling these representations as agreed.

Additional Information (if applicable): [Include any additional information, disclosures, or conditions relevant to the representations.]

Request for Confirmation: Kindly confirm your understanding and acceptance of these representations by signing and returning a copy of this letter at your earliest convenience.

Thank you for your attention to this matter. I look forward to our continued collaboration and the successful realization of our mutual goals.

[Your Contact Information]

Representation Letter Format – Example

Here’s an Example of Representation Letter Format:

I am writing this letter on behalf of XYZ Corporation to officially confirm certain representations made during our recent negotiations for the acquisition of ABC Company. This letter serves as a formal documentation of the representations and commitments made during the discussions.

Details of Representations:

  • Financial Statements: The financial statements provided accurately represent the financial condition of ABC Company as of [specific date], including all assets, liabilities, and financial performance metrics.
  • Pending Litigation: As of the representation date, ABC Company is not involved in any pending litigation, and there are no legal proceedings or disputes that could materially impact its business operations.
  • Contracts and Agreements: All material contracts and agreements disclosed during the negotiations are accurate and complete, and ABC Company is in compliance with the terms of these contracts.

Confirmation of Accuracy:

I hereby confirm that the representations mentioned above are accurate and complete based on the information available to us as of [specific date]. XYZ Corporation is committed to ensuring that these representations remain accurate up to the closing date of the acquisition.

Request for Confirmation:

Please confirm your understanding and acceptance of these representations by signing and returning a copy of this letter at your earliest convenience. If there are any discrepancies or additional information that needs to be considered, kindly inform us promptly.

Thank you for your attention to this matter. We believe that a transparent and accurate representation of the relevant information is crucial for the success of our upcoming acquisition.

Representation Letter Format for Financial Statements

Here’s a Representation Letter Format For Financial Statements:

[Company Letterhead]

[External Auditor’s Name] [External Auditor’s Address]

Dear [Auditor’s Name],

We confirm that we have provided you with all necessary information regarding the financial statements of [Company Name] for the year ended [Date]. We also confirm that the information we have provided is complete, accurate, and in accordance with Generally Accepted Accounting Principles (GAAP).

In connection with your audit, we make the following representations:

All financial records and related data have been made available to you for examination and inquiry.

All transactions have been recorded in the financial statements and are reflected in the appropriate accounts.

The financial statements fairly present, in all material respects, the financial position of the company as of [Date] and the results of its operations and cash flows for the year then ended.

We have disclosed all material information regarding contingent liabilities and commitments that may affect the financial position of the company.

We have identified and disclosed to you all related-party transactions and arrangements.

We confirm that there are no other material transactions, arrangements, or events that have not been properly disclosed to you.

We acknowledge that we are responsible for the preparation and fair presentation of the financial statements in accordance with GAAP. We further acknowledge our responsibility for designing, implementing, and maintaining effective internal control over financial reporting, and that we have disclosed to you any significant deficiencies or material weaknesses identified during our assessment of internal control.

Please let us know if you require any further information or clarification.

[Authorized Company Representative’s Name and Signature]

Representation letter format for partnership agreement

A formal representation letter confirming accuracy in key aspects of a partnership agreement, emphasizing commitment to fulfill obligations and ensure a successful partnership.

[Partner’s Name]

[Partner’s Title/Position]

[Partner’s Company Name]

Subject: Representation Letter for Partnership Agreement

Dear [Partner’s Name],

I, [Your Name], in my capacity as [Your Title/Position] of [Your Company Name], hereby provide this representation letter to confirm the accuracy and completeness of certain information in relation to the partnership agreement between [Your Company Name] and [Partner’s Company Name].

  • Financial Information: The financial statements provided by [Your Company Name] accurately reflect its financial position, including assets, liabilities, and financial performance, as of [specific date].
  • Legal Compliance: [Your Company Name] is in compliance with all applicable laws and regulations relevant to the proposed partnership agreement.
  • Contractual Agreements: All material contracts and agreements entered into by [Your Company Name] have been disclosed and are accurate and complete.
  • Business Operations: [Your Company Name] operates its business in accordance with industry best practices and ethical standards.

Confirmation of Accuracy: I confirm that, to the best of my knowledge and belief, the representations mentioned above are accurate and complete. I understand the importance of these representations in the context of our partnership agreement, and I assure you that [Your Company Name] is committed to fulfilling these representations as agreed.

Additional Information (if applicable): [Include any additional information or disclosures relevant to the partnership agreement.]

Thank you for your attention to this matter. We look forward to a successful and collaborative partnership between [Your Company Name] and [Partner’s Company Name].

Representation Letter Format for Partnership Agreement

Representation Letter format – Template

Here’s a Template of Representation Letter format:

I, [Your Name], in my capacity as [Your Title/Position] of [Your Company Name], am writing to confirm certain representations made during our recent discussions/negotiations/meetings pertaining to [Specify the context of representations, e.g., a business transaction, partnership, agreement, etc.].

Corporate representation letter format

A formal corporate representation letter confirming accuracy and completeness of information, typically used to assure external parties regarding key aspects of the company’s affairs.

Subject: Corporate Representation Letter

I, [Your Name], in my capacity as [Your Title/Position] of [Your Company Name], hereby provide this representation letter to confirm the accuracy and completeness of certain information pertaining to our corporate representation.

  • Financial Information: The financial statements of [Your Company Name] accurately present its financial position, including assets, liabilities, and financial performance, as of [specific date].
  • Legal Compliance: [Your Company Name] is in compliance with all applicable laws and regulations relevant to our business operations.
  • Business Operations: [Your Company Name] conducts its business in adherence to industry best practices and ethical standards.

Confirmation of Accuracy: I confirm that, to the best of my knowledge and belief, the representations mentioned above are accurate and complete. I understand the importance of these representations in the context of our corporate dealings, and I assure you that [Your Company Name] is committed to fulfilling these representations as agreed.

Additional Information (if applicable): [Include any additional information or disclosures relevant to our corporate representation.]

Thank you for your attention to this matter. We look forward to continued positive and transparent corporate interactions between [Your Company Name] and [Recipient’s Company Name].

Corporate Representation Letter Format

Legal representation letter format

A concise legal representation letter confirming legal aspects of a specific matter, ensuring compliance, validity, and confidentiality, and seeking recipient confirmation.

[Your Company or Law Firm Name]

[Company or Law Firm Address]

[Recipient’s Company Name or Address]

Subject: Legal Representation Letter

I, [Your Name], in my capacity as [Your Title/Position] at [Your Company or Law Firm Name], am writing to confirm and represent the legal aspects pertaining to [specific matter or transaction].

  • Legal Compliance: [Your Company or Client] is in compliance with all relevant laws and regulations concerning the aforementioned matter.
  • Contractual Agreements: All legal agreements, contracts, and documents associated with this matter are accurate, valid, and executed in accordance with the applicable legal requirements.
  • Litigation and Disputes: There are no pending or threatened legal actions, disputes, or litigations that could adversely impact [Your Company or Client].
  • Confidentiality and Compliance: We assure compliance with confidentiality agreements and legal requirements related to sensitive information.

Confirmation of Accuracy: I confirm that the representations made above are accurate and complete based on the legal information available to us as of [specific date]. [Your Company or Client] is committed to maintaining legal integrity in all aspects of the matter.

Request for Confirmation: Kindly acknowledge your understanding and acceptance of these legal representations by signing and returning a copy of this letter at your earliest convenience.

Thank you for entrusting us with your legal matters. We look forward to continued collaboration.

[Your Company or Law Firm Contact Information]

Legal Representation Letter Format

formal Representation Letter format

A formal representation letter affirming key details, ensuring accuracy, and seeking recipient acknowledgment in a concise and professional manner.

[Your Company Name or Law Firm Name] [Company or Law Firm Address]

Subject: Formal Representation Letter

I, [Your Name], in my capacity as [Your Title/Position] at [Your Company or Law Firm Name], am writing to formally represent and confirm certain matters related to [specific context, such as a transaction, agreement, or legal issue].

  • [Representation 1]: [Provide details and context for the first representation.]
  • [Representation 2]: [Provide details and context for the second representation.]
  • [Representation 3]: [Provide details and context for the third representation.]

Confirmation of Accuracy: I confirm that the representations made above are accurate and complete based on the information available to us as of [specific date]. [Your Company or Client] is committed to upholding these representations throughout the course of [transaction, agreement, legal matter, etc.].

Additional Information (if applicable): [Include any relevant additional information, disclosures, or conditions.]

Request for Confirmation: Kindly confirm your understanding and acceptance of these representations by signing and returning a copy of this formal letter at your earliest convenience.

Thank you for your attention to this matter. We value our professional relationship and are dedicated to ensuring the integrity of the representations made.

Formal Representation Letter Format

Email Format about Representation Letter format

Here’s an Email Format for Representation Letter Format:

Subject: Request for Representation Letter

Dear [Company Representative],

I hope this email finds you well. As part of our audit procedures, we are requesting a representation letter from [Company Name] to confirm the accuracy and completeness of the financial statements for the year ended [Date].

We kindly request that you provide us with a representation letter in accordance with our standard format, which includes the following sections:

Introductory Paragraph: This section should identify the company’s name, the date of the letter, and the purpose of the letter, which is to provide representations to the auditors.

Scope of Audit: This section outlines the scope of the audit, including the period covered, the financial statements being audited, and any specific areas of focus.

Representations: This section includes a list of representations that management or the board of directors are providing to the auditors. These representations typically include assertions related to the completeness and accuracy of financial statements, disclosures, and other relevant information.

Qualifications and Limitations: This section outlines any qualifications or limitations to the representations being made. For example, the company may note that they are only providing representations to the best of their knowledge and that certain information may not be known with certainty.

Signature and Date: The letter must be signed by an appropriate representative of the company, such as the CEO or CFO, and dated to indicate when the representations were made.

We would appreciate it if you could provide the representation letter as soon as possible to ensure that we can complete our audit within the necessary timeframe.

Please let us know if you have any questions or require any further information.

Thank you for your cooperation.

[Auditor’s Name]

Email Format about Representation Letter Format

Representation Letter Format for Compliance Audit

Here’s a Representation Letter Format For Compliance Audit:

We confirm that we have provided you with all necessary information regarding our compliance with [applicable laws, regulations, or standards] for the period ended [Date]. We also confirm that the information we have provided is complete, accurate, and in accordance with the requirements of [applicable laws, regulations, or standards].

We have complied with all applicable laws, regulations, or standards that may have a material effect on our operations.

We have identified and disclosed to you any noncompliance issues that we have become aware of.

We have disclosed all material information related to our compliance with [applicable laws, regulations, or standards].

We confirm that there are no other material noncompliance issues that have not been properly disclosed to you.

We acknowledge that we are responsible for complying with all applicable laws, regulations, or standards and that we are responsible for implementing and maintaining effective compliance programs to ensure compliance with these requirements.

Representation letter format for due diligence

A concise representation letter for due diligence, ensuring accuracy and transparency in key details, vital for a thorough understanding during the due diligence process.

Subject: Representation Letter for Due Diligence

I, [Your Name], in my capacity as [Your Title/Position] at [Your Company or Law Firm Name], am writing to provide representations and confirmations related to the due diligence process conducted on behalf of [Your Company or Client] for the purpose of [specific context].

Confirmation of Accuracy: I confirm that the representations made above are accurate and complete based on the information available to us as of [specific date]. These representations are made in connection with the due diligence process and are intended to provide a comprehensive understanding of [Your Company or Client]’s affairs.

Request for Confirmation: Kindly confirm your understanding and acceptance of these representations by signing and returning a copy of this letter at your earliest convenience. This confirmation is essential for the due diligence process.

Thank you for your cooperation and understanding. We look forward to a successful completion of the due diligence process.

Representation Letter Format for Due Diligence

FAQS for Representation Letter Format

What is the purpose of a representation letter format in a business transaction.

A Representation Letter Format is used to confirm the accuracy and completeness of certain information or statements made during a business transaction, partnership, or agreement.

Are Representation Letter Format legally binding documents?

Representation Letter Format is typically considered legally binding to the extent that they reflect the true and accurate information at the time they are issued. However, the legal implications may vary depending on jurisdiction and the specific terms outlined in the letter.

What should be included in a Representation Letter Format for due diligence?

A Representation Letter Format for due diligence should include specific details about the accuracy and completeness of information relevant to the due diligence process. This may include financial statements, legal compliance, and any other key aspects of the business.

How can one ensure the effectiveness of a Representation Letter Format?

To ensure the effectiveness of a Representation Letter Format, it should be clear, specific, and address all relevant aspects of the transaction or agreement. It’s important to use precise language and ensure that the letter is tailored to the specific context.

Is it necessary to involve legal professionals in drafting a Representation Letter Format?

In complex transactions or legal matters, involving legal professionals in drafting a Representation Letter Format is advisable. They can ensure that the letter complies with legal standards and adequately protects the interests of the parties involved.

Can a Representation Letter Format be used in mergers and acquisitions?

Yes, Representation Letter Format is commonly used in mergers and acquisitions to confirm the accuracy of financial statements, compliance with laws, and other key representations that impact the transaction.

Is a Representation Letter Format one-sided, or do both parties typically provide one?

In some cases, both parties involved in a transaction may provide Representation Letter Format. This ensures a mutual understanding and acknowledgment of the accuracy of the information exchanged between them.

The representation letter format is a standard format that is used to provide assurance that information is accurate and complete . It is an important document that can be used in a variety of situations, and it can help to limit liability for the sender . If you need to prepare a representation letter, it is important to follow the standard format and to be as thorough as possible in your representation statement.

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Letters of representation

The letter of representation is a letter which is written from the officers of the club or society to the auditors. However, it is common practice for this to be drafted by the auditors and then sent to the officers to be printed on their headed paper and signed and returned.

The letter sets out responsibilities and representations made by the officers to the auditor to confirm that certain matters have been undertaken and confirm the responsibilities of the officers to ensure there is no misunderstanding.

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How chicken factory musical Chuck Chuck Baby became a love letter to working-class women

Louise Brealey and Janis Pugh, star and writer-director of this summer’s best British indie film, Chuck Chuck Baby, on class, women and representation

Louise Brealey in Chuck Chuck Baby

Louise Brealey in Chuck Chuck Baby. Image: Artemisia Films

Chuck Chuck Baby is a love story musical set in and around a North Wales chicken factory. The indie film stars Louise Brealey – best known as monstrous Deb in this year’s Bafta-winning comedy Such Brave Girls and Molly Hooper in Sherlock – as Helen, who’s caught in a tangled web of relationships around the terrace where she lives. 

Made on a shoestring and shot in just 26 days by 50-year-old Janis Pugh – a writer-director making her debut feature – the film is a beautiful depiction of working-class lives and joy and community and love. It also features some of the real-life factory workers it depicts. 

Here, Brealey talks to Pugh about class, women and how music soundtracks our lives. 

Louise Brealey: You’re just back from Flintshire, where we filmed  Chuck Chuck Baby  about a hundred years ago now. Big night?

Janis Pugh: Yeah. I’m knackered! Fifty women in the pub after a hard week of working, all drinking and singing every word to Meat Loaf’s  Two Out of Three Ain’t Bad . I looked around and thought,  This is what it’s all about.  It was the pub I took you to when you were prepping to play Helen.

  • Spent star Michelle de Swarte: ‘Someone had to tell me I was homeless – I was in such denial’
  • Back to Black actor Eddie Marsan: ‘There aren’t any no-go areas in Tower Hamlets’

LB: That place was amazing. How much is it a pint again?

JP: She keeps it at £2.50 because people can’t afford to pay more. And she puts on a bit of entertainment. Life is hard in a small town when there’s not a lot of money or prospects. So when they go out, there’s this real sense of an outlet with each other. They get dressed up, go for a real wash-up and use music to outpour pain and laughter.

LB: One reason I wanted to work with you was that the script felt like a celebration of working-class women like my mum and her mum. Before we met, I watched  House , your short doc with your mum, who you lost in 2012, in it with her friends from the plastic bag factories. How important was that connection between women for you? 

JP: From the moment I started writing, I wanted to put these incredible women on a platform and celebrate them. This weekend I felt again the beauty of the support network in those communities. And we see it through the film, especially when Helen and her friends steal a trolley and walk up Mushroom Mountain singing  Northern Lights  by The Renaissance. 

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LB: I get a proper heart-lift when I watch that scene; it’s full of pure joy. At the world premiere in Edinburgh I was on the same row as Vanessa, Amanda and Babs, the real chicken factory women who were supporting artists in the film. There’s a moment where they are seen in close-up on the big screen. They didn’t know it was coming, but I did. So I looked down the row to watch them see themselves – and see themselves being seen. Whenever I think about that moment I feel tearful. Because women like them, and like Helen, usually get overlooked. It was properly magical.

JP: In the edit I was asked to take them out. That was a big battle.

LB: Bloody hell, I didn’t know that! What?! I  love  that bit. There’s an almost documentary quality to it. You see the “real” women and understand that this is about,  and for,  all these women. We’ve seen the film through the prism of Helen’s journey, but in that moment, to me, the film becomes a love song to those women.

JP: It is. It is a love letter to them. Shall we talk about how the film responds to how working-class communities have been splintered by the closing down of factories, unemployment and Brexit? 

LB: When Annabel Scholey’s character Joanne comes back after 20 years to clear out her dad’s old council house, she can’t believe the high garden fences everywhere, separating neighbour from neighbour. The metaphor is really powerful.

JP: The fences make everyone become an island within their own garden, shutting people out and losing each other and the community. 

LB: Exactly. We shot on an estate near Flint station and in the amazing wild landscapes around there. Is the town a character in the film for you?

JP: My mum and dad used to live on that street. When we were filming, one of the neighbours came round with photos of them I’d never seen. I was wary of shooting in Flint because it’s not a film about the town, it’s broader than that. But the detail and people are specifically the town I know. Even walking around Flint this weekend, I could feel how I felt when I was 14 – freezing in a pair of bloody jelly beans in the snow because they were the only shoes I had. And it stays with me.

LB: Could you talk about the pressure you had to make the characters younger? We’re paying a lot of lip service in our industry to the idea of front-and-centering older women. But there is a gap between a perception of change and what is happening, which is a few high-profile actresses being allowed to tell interesting stories while the vast majority face a huge decline in their careers once they hit 40. I’m working much less, and that is down to maths: the parts are not there. Why did you want the characters in  Chuck Chuck  to be that age?

JP: The industry thinks an audience is not interested in older people and I think they’re very, very wrong. They think they’re not marketable. But we’ve seen how festival audiences across the world have responded to five women in their 40s. The industry is run by a bunch of people who believe in “big names, young women”. And it’s so boring.  

LB: For me it was a dream part. I don’t think I’ve directly said this to you before, but I felt an affinity with you. Like you, I feel I have a lot to give, creatively, and haven’t always been given the chance in the work I’ve been allowed to do. I look at you and your vision and I’m looking at someone who is 50 and this is your feature debut. I find that incredibly exciting. I’m thinking, Don’t write us off. Give us the chance to tell these stories, to show what we can do. Give us the chance to shine. 

Chuck Chuck Baby is in UK cinemas 19 July. Find your nearest screening here

Do you have a story to tell or opinions to share about this?  Get in touch and tell us more .  Big Issue exists to give homeless and marginalised people the opportunity to earn an income.  To support our work buy a copy of the magazine  or get the app from the  App Store  or  Google Play .

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Letter: Legislature’s education funding opponents

In March, the Alaska Houe of Representatives failed to overturn the governor’s veto and killed a bipartisan education bill, failing to raise the Base Student Allocation formula funding.

As we prepare to vote in the Alaska primary election next month, allow me to remind you of who

in the House upheld that veto: Jamie Allard, Thomas Baker, Ben Carpenter, Julie Coulombe, Mike Cronk, David Eastman, Craig Johnson, Delena Johnson, Kevin McCabe, Tom McKay, Mike Prax, Dan Saddler, Laddie Shaw, Cathy Tilton, Frank Tomaszweski and Sarah Vance.

In the Alaska Senate, Sens. Shelley Hughes, Robert Myers, Mike Shower, David Wilson also declined to support the funding.

Our children deserve better representation in Juneau.

— Louise Lazur

Have something on your mind? Send to [email protected] or click here to submit via any web browser. Letters under 200 words have the best chance of being published. Writers should disclose any personal or professional connections with the subjects of their letters. Letters are edited for accuracy, clarity and length.

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Optics Letters

  • pp. 4022-4025
  • • https://doi.org/10.1364/OL.530258

Article Cover

Fringe pattern analysis based on the two-dimensional synchrosqueezing transform

Tsubasa Kusano, Kohei Yatabe, and Yasuhiro Oikawa

Author Affiliations

Tsubasa Kusano, 1, * Kohei Yatabe, 2 and Yasuhiro Oikawa 1

1 Department of Intermedia Art and Science, Waseda University, 3-4-1 Ohkubo, Shinjuku-ku, Tokyo 169-8555, Japan

2 Department of Electrical Engineering and Computer Science, Tokyo University of Agriculture and Technology, 2-24-16 Naka-cho, Koganei-shi, Tokyo 184-8588, Japan

* Corresponding author: [email protected]

  
  

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  • Fourier Optics, Image and Signal Processing
  • Fourier transforms
  • Fringe analysis
  • Spatial frequency
  • Wavelet transforms
  • Original Manuscript: May 15, 2024
  • Revised Manuscript: June 29, 2024
  • Manuscript Accepted: July 1, 2024
  • Published: July 12, 2024
  • Full Article
  • Figures ( 7 )
  • Data Availability
  • Equations ( 16 )
  • References ( 32 )
  • Back to Top

Windowed Fourier transform (WFT) is used to analyze fringe patterns observed from optical measurements. The space–frequency resolution of the WFT is limited, which affects the analyzing performance. In this Letter, we propose to apply the two-dimensional synchrosqueezing transform (SST) for analyzing fringe patterns. The SST is a technique used to overcome the limitation of the space–frequency resolution of the WFT, which sharpens the WFT representation using the derivative of the WFT phase. Numerical experiments confirm the effectiveness of the SST in denoising the fringe pattern and estimating the local frequency from the observed fringe pattern.

© 2024 Optica Publishing Group. All rights, including for text and data mining (TDM), Artificial Intelligence (AI) training, and similar technologies, are reserved.

what is representation letter

Qian Kemao Appl. Opt. 43 (13) 2695-2702 (2004)

what is representation letter

Ming Zhao and Qian Kemao Appl. Opt. 54 (3) 587-594 (2015)

what is representation letter

Kemao Qian, Yu Fu, Qi Liu, Hock Soon Seah, and Anand Asundi Opt. Lett. 31 (14) 2121-2123 (2006)

what is representation letter

Qian Kemao, Haixia Wang, and Wenjing Gao Appl. Opt. 47 (29) 5408-5419 (2008)

what is representation letter

William W. Macy Appl. Opt. 22 (23) 3898-3901 (1983)

Data availability

Data underlying the results presented in this Letter are not publicly available but may be obtained from the authors upon reasonable request.

Contact your librarian or system administrator or Login to access Optica Member Subscription

Figures (7)

Equations (16).

Miguel Alonso, Editor-in-Chief

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  1. Example of a representation letter in Word and Pdf formats

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  2. Letter of Representation

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  5. 11+ Management Representation Letter Templates in DOC

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  6. Management representation letter

    what is representation letter

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  1. What is a Representation Letter?

    A representation letter is a written statement provided by a company's management to its auditors as part of the audit process. The representation letter confirms that the information provided to the auditors is complete, accurate, and fairly presented in accordance with the applicable financial reporting framework.

  2. Management representation letter definition

    A management representation letter is a form letter written by a company's external auditors, which is signed by senior company management.

  3. What is a Representation Letter?

    A representation letter is a form of written representation obtain from a client. Written representations are audit evidence that auditors collect.

  4. What is the difference between an Engagement Letter and Representation

    The Representation Letter is issued with the draft audit and is required by auditing standards to finalize the audit. The Representation Letter is a letter from the Association to our firm confirming responsibilities of the board and management for the financial statements, as well as confirming information provided to us during the audit.

  5. AS 2805: Management Representations

    Introduction. .01 This section establishes a requirement that the independent auditor obtain written representations from management as a part of an audit of financial statements performed in accordance with the standards of the PCAOB and provides guidance concerning the representations to be obtained.

  6. PDF Management Representations

    2 An illustrative representation letter from management is contained in paragraph .16 pendix A, "Illustrative Management Representation Letter". 3 Specificrepresentationsalsoareapplicabletofinancialstatementspresentedinconformitywith

  7. Understanding the Representation Letter

    The letter needs to be signed at the end of the engagement generally after a draft of the financial statements are issued. Schwindt & Co combines the representation letter with the management letter comments and proposed adjusting journal entries for ease of review. When the signed document is received by our office, we are then able to issue ...

  8. The Role of Management Representation Letters in Audits

    Explore the significance of management representation letters in audits, their preparation process, and common misunderstandings in this insightful overview.

  9. Management Representation Letter

    A management representation letter is a formal document issued by senior management of an organization confirming the accuracy and completeness of financial information presented in the financial statements. It is a critical document that helps auditors or other parties to obtain reasonable assurance that the financial statements are reliable.

  10. Audit Letter of Representation (LOR) for SOC Audits

    A letter of representation (a.k.a., representation letter, rep. letter, LOR) in audit services is a form letter from the American Institute of Certified Public Accountants typically prepared by the external auditors on behalf of a company's management that is signed by a member of executive leadership. By signing the letter of representation ...

  11. Management representation

    Management representation is a letter issued by a client to the auditor in writing as part of audit evidences. [1] The representations letter covers all periods encompassed by the audit report, and is dated the same date of audit work completion. It is used to let the client's management declare in writing that everything is MRL and is ...

  12. What is a Representation Letter?

    Representation Letter Overview What is a representation letter? From Association to CPA Represents the audited financial statements are the responsibility of management/those charged with governance (Board) Management confirms to best […]

  13. What is a Letter of Representation in Auditing?

    Do you know what is a Letter of Representation in auditing? It is an essential document in the auditing process. This letter is signed by an executive leader and is usually written by external auditors on behalf of the organization's management.

  14. What is the management representation letter?

    Introduction. External auditors have the responsibility of writing a form letter which is more formally known as the management representation letter. This management representation letter is supposed to be signed by the senior management of the organization. The accuracy of the financial statements is crucial when it comes to management ...

  15. The Role of Management Representations in Financial Reporting

    A 'management representation' or 'written representation' is a formal statement from a company's senior management provided to accountants or auditors. The document should be signed by a duly authorised member of management, such as the CEO or CFO. It typically includes statements that all financial information, to the best of management's knowledge, is accurate and complete. The scope ...

  16. Management Representation Letter: Format, Content, Signature

    A management representation letter is a form letter written by a company's external auditors, which is signed by senior company management. The letter attests to the accuracy of the financial statements that the company has submitted to the auditors for their analysis. The CEO and the most senior accounting person (such as the CFO) are ...

  17. What Is a Representation Letter?

    The Letter of Representations is a letter written from the Association to its accountant representing that the financial statements for the time period covered by the engagement are the responsibility of "management". In a community association, management include "those charged with governance" (the board of directors) and the professional ...

  18. PDF What is a Representation Letter

    Summary. • Required by auditing and accounting standards. • Clarifies to the best of management's/board's knowledge that the statements are correct. • Must be signed by those governing and managing an association. • Notifies the CPA the final audit can be issued. In More Detail. Please reference the attached sample representation ...

  19. What is a management representation letter?

    A "rep" letter is the audit teams' formal evidence that management understands their responsibilities and that management has performed all of their responsibilities. Management should provide the auditor with a representation letter in writing that outlines the following characteristics: A) Managements acceptance for its responsibility ...

  20. Letter of representation

    A formal written record of representations made by the management of an organization to the auditors. The letter is prepared by the auditor and signed by management on a date as near as possible to the date of the auditors' report and after all audit work has been completed, including the review of events occurring after the balance sheet ...

  21. Demystifying ISA 580: Management Representation Letters in Auditing

    In the intricate world of auditing, there exists a pivotal document known as the Management Representation Letter, guided by ISA 580. This document plays a central role in audits, acting as a conduit for communication between management and auditors. In this comprehensive exploration, we delve deep into the intricacies of the Management Representation Letter, covering all 19 key points ...

  22. 15+ Examples

    A representation Office letter format is a written statement or document that a company's management or board of directors provides to their external auditors to confirm the accuracy and completeness of the information they have presented to them. The representation letter format serves as a crucial component of an audit and is often requested by the auditors as part of their audit procedures.

  23. Letters of representation

    Letters of representation. The letter of representation is a letter which is written from the officers of the club or society to the auditors. However, it is common practice for this to be drafted by the auditors and then sent to the officers to be printed on their headed paper and signed and returned. The letter sets out responsibilities and ...

  24. Chuck Chuck Baby is a love letter to working-class women

    Louise Brealey and Janis Pugh, star and director of great new indie film, Chuck Chuck Baby, talk about class, women and representation.

  25. Letter: Legislature's education funding opponents

    Our children deserve better representation in Juneau. In March, the Alaska Houe of Representatives failed to overturn the governor's veto and killed a bipartisan education bill, failing to raise ...

  26. Fringe pattern analysis based on the two-dimensional synchrosqueezing

    In this Letter, we propose to apply the two-dimensional synchrosqueezing transform (SST) for analyzing fringe patterns. The SST is a technique used to overcome the limitation of the space-frequency resolution of the WFT, which sharpens the WFT representation using the derivative of the WFT phase.