Letter of representation template
A letter of representation is a signed statement from a company's directors to its accountant or auditor, confirming that they have given complete and accurate information for the year-end accounts. It lists the specific representations made, covers the going concern position and is signed by the board. It is requested at the end of every audit and many accounts preparation engagements.
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What changes each time
16 values. Everything else is your wording, kept exactly.
The company
- Company's full legal name
- Registered office address
- Date
The accountant or auditor
- Name
- Firm's name
- Address
The accounts
- Period
- Year-end date
- Applicable framework
- Note number for director loans
The representations
- Each representation
- Customer or amount for any matter listed
- Matters disclosed on going concern
- Date of the board meeting
Signing
- Director who signs
- Second signatory, if required
The rules it usually needs
Written in plain English when the template is set up.
- One of several wordings
“The letter relates to an audit of the financial statements, or to accounts.”
The document carries the wording for whichever applies, and the other wording is left out.
- One of several wordings
“The directors' accounts give a true and fair view, or comply with the Companies Act and the framework.”
The document carries the wording for whichever applies, and the other wording is left out.
- Only when…
“Include the sentence on loans to and from directors only when it is relevant.”
When this applies, the sentence on loans to and from directors is included; when it does not, it is left out and the rest of the document is unchanged.
- Only when…
“Include the audit paragraphs only when the engagement is an audit.”
When this applies, the audit paragraphs is included; when it does not, it is left out and the rest of the document is unchanged.
- Once for each item
“One row for each representation the directors make.”
The table has one row for each, so it grows or shrinks to match.
- Only when…
“Include the going concern section only when it is an audit, or the accounts are unaudited and there is uncertainty about going concern.”
When this applies, the going concern section is included; when it does not, it is left out and the rest of the document is unchanged.
- One of several wordings
“The directors are not aware of anything casting doubt on going concern, or they have disclosed it.”
The document carries the wording for whichever applies, and the other wording is left out.
- Only when…
“Include a second signature block only when a second signature is required.”
When this applies, a second signature block is included; when it does not, it is left out and the rest of the document is unchanged.
- Only when…
“Include the schedule of uncorrected misstatements only when it is an audit.”
When this applies, the schedule of uncorrected misstatements is included; when it does not, it is left out and the rest of the document is unchanged.
Questions people ask
What is a letter of representation?
It is a letter from a company's directors to its auditor or accountant confirming the information they have provided and the judgements they have made in preparing the accounts. It is evidence that the directors accept responsibility for them.
Is a letter of representation a legal requirement?
Auditing standards require auditors to get written representations from management, so for audited accounts it is effectively required. For unaudited accounts many accountants ask for one as good practice.
Who signs a letter of representation?
Normally a director, often the same one who signs the balance sheet, and sometimes the company secretary as well. The letter is approved by the board.
When should the letter be dated?
For an audit, as close as possible to, and not after, the date of the auditor's report, because it covers what the directors know up to then.
What does it say about going concern?
That the directors are not aware of anything that casts significant doubt on the company's ability to continue, or, if they are, that they have disclosed it to the auditor along with their plans.
Use this template
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