- Skip to main content
- Skip to footer
Request a Proposal
What is a Representation Letter?
May 18, 2021
Representation Letter
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 of their knowledge
What is the timing of a representation letter?
- Dated the same date as the audit report
- Sent to client with the draft audit
- Board and management company review audited financials and footnotes
- Board and management sign the representation letter upon approval of the financials
- Send to CPA. Notification the final audit report can be prepared and released
Why do we request a signed representation letter?
- Lack of a signed representation letter is considered a scope limitation requiring a qualified audit report, disclaimer of opinion or withdrawal from the audit
- Assures the CPA that management and Board have provided all information requested for the audit
American Institute of Certified Public Accountants (AICPA) Conclusion
“…as management, you are asked to acknowledge that you – rather than the auditor – have primary responsibility for the financial statements and that to the best of your knowledge these statements are correct. The letter does not change or add to your fundamental responsibilities, nor does it relieve the auditor of any of his or her responsibilities. It simply clarifies the traditional roles that management and the auditor perform.”
- 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
- Representation letters are provided in connection with an audit
- Limited to material matters
- An omission or misstatement of accounting information might cause judgement to be changed or influenced
Management confirmations about the financial statements and the information provided to the auditor
- Reference to the engagement letter which discusses the responsibilities of management and the auditor
- Management is responsible for the financial statements. They are the financial presentations of management
- No material misstatements due to fraud or error
- Management is responsible for sufficient internal controls to prevent and detect fraud
- Management believes any estimates are supported by reasonable assumptions (bad debt allowance)
- Any related party activities have been accounted for appropriately and disclosed (footnotes)
- Subsequent events have been disclosed (special assessment, result of litigation)
- Any uncorrected misstatements do not have a material affect on the financial statements
- Litigation is been disclosed (footnotes)
- Material concentrations have been disclosed (FDIC)
- Guarantees – obligations that the association should disclose in the financial statements (significant contracts – large project)
- Any interfund loans that will not be paid have been authorized to be treated as a transfer
Information Provided to the Auditor
- Access to all information
- Access to personnel
- All significant transactions have been recorded
- Management acknowledgement that it does not believe fraud has occurred
- No knowledge of allegations of suspicion of fraud
- Management has no know knowledge of legal non-compliance
- Information for any possible litigation has been shared with the auditor
- Any related party transaction information has been shared with the auditor
- All association assets are owned without liens
- Management acknowledges the requirement
- The information presented is accurate, appropriate and complete
- There have not been significant changes in measurements (component remaining life, estimated current replacement cost)
- Management is assessing members in order to fund reserves based on the latest reserve study
- Revenue Ruling 70-604 resolution approved by members (required for form 1120)
- Management request clarification of tax filing and return presentation as needed
- • Board of Directors (President/Treasurer)
- Managing Agen
PROUD MEMBERS OF
Ready? Take the next step
Contact newman certified public accountant, pc to begin the conversation and explore the possibilities of working together., let’s talk.
Keep In Touch - Sign Up For Our Newsletter
Subscribe for educational articles, events, & updates.
- Name First Last
- Phone This field is for validation purposes and should be left unchanged.
Request a proposal
IMAGES
VIDEO
COMMENTS
Director, Finance and Operations, Hong Kong Institute of Certified Public Accountants, 37/F., Wu Chung House, 213 Queen's Road East, Wanchai, Hong Kong. ... The written representations shall be in the form of a representation letter addressed to the ... management, or about its commitment to or enforcement of these, the auditor shall determine ...
APPENDIX 3 - EXAMPLE OF MANAGEMENT REPRESENTATION LETTER . THE AUDIT OF LICENSED CORPORATIONS AND ASSOCIATED ENTITIES OF INTERMEDIARIES 4 PN 820 (December 2020) ... The purpose of Practice Notes issued by the Hong Kong Institute of Certified Public Accountants (HKICPA) is to assist the auditor in applying Hong Kong Engagement Standards of ...
Example 3 - Management representation letter for report of factual findings in relation to voluntary revocation of authorization Appendix 3 - Examples of engagement letters Example 1 - Engagement letter for reporting under section 63(3) and (3A) for locally incorporated AIs Example 2 - Engagement letter for reporting under section 63(3 ...
AWYv920.xls. A5-2. b material misstatements or omissions in the accounting records of the Company in the current period and. prior periods, except for those disclosed and restated in the financial statements that affect the. comparative information. 4. We confirm that the significant assumptions used by us in making accounting estimates ...
The Hong Kong Institute of Certified Public Accountants (the Institute) is the only body authorized by law to register and grant practising certificates to certified public accountants in Hong Kong. The Institute has more than 42,000 members and more than 18,000 registered students. Members of the Institute are entitled to the description "certified public accountant" and to the ...
under the Auditing and Assurance Standards Committee of the Hong Kong Institute of Certified Public Accountants. Mr. Samuel Chow - Senior Manager, Ernst & Young Mr. Chow has 9 years of experience in assurance. ... 1.6 Management representation letter 7 1. Overview of the Securities and Futures Ordinance requirements. 1.1 Introduction 8.
The Hong Kong Institute of Certified Public Accountants' (Institute) Auditing and ... on Quality Management ("HKSQM") 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services ... Appendix 4 Example Issuer's Representation Letter on Subsequent Changes
.07 The representation letter ordinarily should be tailored to include addi-tional appropriate representations from management relating to matters spe-cific to the entity's business or industry.14 Examples of additional represen-tations that may be appropriate are provided in paragraph .17 appendix B, "Additional Illustrative Representations."
Scope of this ISA. 1. This International Standard on Auditing (ISA) deals with the auditor's responsibility to obtain written representations from management and, where appropriate, those charged with governance in an audit of financial statements. 2.
0:00 / 3:28 •. Live. •. In November 2018, the Institute has revised the Code of Ethics for Professional Accountants (the "revised Code") adopting the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board (the "International Code ...
This Audit Guidance Statement (AGS) 11, Comfort Letters and Due Diligence Meetings is based on Hong Kong Standard on Investment Circular Reporting Engagements 400, Comfort Letters and Due Diligence Meetings issued by the Hong Kong Institute of Certified Public Accountants (HKICPA), adapted by the Institute of Singapore Chartered Accountants ...
The IASB has completed redeliberations of the proposals in the ED and is in the process of drafting the new IFRS Accounting Standard − IFRS 18 Presentation and Disclosure in Financial Statements. The IASB expects to publish IFRS 18 in April 2024. IFRS 18 will be effective for annual reporting periods beginning on or after 1 January 2027.
The Institute has suggested that audited accounts and management representation letters could be used to verify continuing ownership of the P&M. Other documents could be referred to show that there is no right to sell goods domestically under the import processing contract.
Introduction. The Institute adopted HKFRS for Private Entities as a reporting option for entities in Hong Kong which have no public accountability on 30 April 2010. The objective is to ease the reporting burden of eligible entities by relieving them of the requirement to apply full Hong Kong Financial Reporting Standards ("HKFRSs").
Under HKSQM 1, firms are required to design a system of quality management to manage the quality of engagements performed by the firm. This shift in focus from quality control to quality management is achieved by incorporating a risk-based approach, i.e., managing risks to quality. HKSQM 1 applies to all firms performing audits or reviews of ...
T hrough involvement in international standard setting, international accounting organizations and forums, responding to consultations, and holding local consultations and outreach activities, the Institute is at the forefront of the development of new standards and legislation, and represents the views and concerns of the Hong Kong profession, ensuring its views are taken into account.
Q3. The HKICPA's Financial Reporting and Auditing Alert Issue 11 mentions that in some cases, borrowers may be able to obtain "comfort letters" from their lenders indicating that loans will not be called within the next twelve months and therefore the term loans that are subjected to repayment on demand clause would not be classified as current liabilities in the financial statements.
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 ...
Representation letters are provided in connection with an audit. Limited to material matters. Material if: An omission or misstatement of accounting information might cause judgement to be changed or influenced. Management confirmations about the financial statements and the information provided to the auditor.
Hong Kong Institute of Certified Public Accountants reprimanded Mr. Ng Kwok Ching, Jeremy, certified public accountant (practising) (A00976), and ordered cancellation of his ... obtaining management's representation letter, and preparing documentation. ... An engagement letter of Client L dated 17 November 2014 which was signed by the ...