representation letter explanation

Creating a Representation Letter

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.

Introduction

Drafting a representation letter is an essential step in the legal process. Failure to do so can lead to a misunderstanding between parties, leaving one or both at risk of potential legal repercussions. Representation letters clearly outline the roles and responsibilities of each party involved and ensure that the individual or business being represented understands their rights, obligations and scope of authority. What’s more, these letters also protect against any legally-binding mistakes made by the representative during the course of their work.

At Genie AI, our team have developed a vast community template library which holds millions of data points which inform our AI as to what constitutes a market-standard representation letter. With our library, anyone can quickly draft and customise high quality legal documents without paying for costly lawyer fees - it’s open source! Our simple yet comprehensive guide provides step-by-step guidance on how to create your own representation letter using our template library; so you can trust you’re getting it right every time.

So if you’re looking for free representation letter templates with no strings attached – Genie AI is here for you. Read on below to get started with our step-by-step guide now and access our template library today!

Definitions (feel free to skip)

Legal Binding: A legally binding agreement is an enforceable agreement between two or more parties, which is legally recognized by a court of law.

Notarization: Notarization is a process that ensures the authenticity of a document and is typically done by a notary public.

Informed Consent: Informed consent is a process in which a person voluntarily agrees to participate in something after being fully informed of the risks, benefits, and other details of the activity.

Enforceable: Enforceable means that a legal agreement or contract is legally binding and can be enforced by the courts.

Explain the purpose of a representation letter and why it is important

Outline the key elements that should be included in the representation letter such as an introduction, a description of the agreement, the responsibilities of each party, the signatures of the parties, and any other details that may be necessary, describe the process of how to write and organize a representation letter, taking into account the legal aspects and the desired outcome, provide guidance on the formatting and layout of a representation letter, explain how to sign and date a representation letter, including the requirements for notarization and other legal measures, discuss how to ensure that the representation letter is legally binding and enforceable, such as by using specific language in the letter, list the documents, evidence and information needed to support a representation letter, such as witness statements or other forms of proof, explain when and how to use a representation letter in legal matters, and the types of situations that require a representation letter, detail the responsibilities of the representative and the individual or company represented, such as the obligations of each party and their rights with respect to the agreement, discuss the potential legal implications of not having a representation letter in place, such as the consequences of not meeting legal requirements, provide recommendations for how to ensure that a representation letter meets all legal requirements, summarize the key points of the article, get started.

• Understand what a representation letter is - it is a document that is signed by two parties to confirm the agreement they have made and the rights and responsibilities of each party
• Learn why representation letters are important - they provide a legal and binding agreement between the parties involved, and ensure that all parties are aware of the terms of the agreement
• Understand the consequences of not using a representation letter - without a representation letter, there is no written record of the agreement, which could lead to disputes and misunderstandings between the parties involved.
• Introduction: Introduce the purpose of the representation letter, the parties involved and their roles.
• Description of Agreement: Outline the details of the agreement, including the scope of the representation, the terms, and any other relevant information.
• Responsibilities of Each Party: Describe the duties and responsibilities that each party has in the agreement.
• Signatures of the Parties: Include the signature of each party on the letter.
• Other Details: Include any other details that may be necessary to clarify the agreement, such as timelines, deadlines, or any other special conditions.

When you can check this off your list and move on to the next step:

• Once all of the key elements have been outlined in the representation letter, you can move on to the next step in the guide.
• Start by outlining the scope of the representation. What are the legal rights and responsibilities of each party?
• Include an introduction that outlines the purpose of the representation letter and how it will be used.
• Identify the parties involved in the agreement.
• Provide a full description of the agreement, including any conditions or restrictions.
• Identify any potential risks or liabilities associated with the agreement.
• List out all the responsibilities of each party, including any obligations or duties.
• Include a signature line for each party at the bottom of the letter.
• Proofread the letter and make sure all information is correct and accurate.

When you have completed this step, you should have an organized representation letter that clearly outlines the scope of the agreement and the rights and responsibilities of each party.

• Begin the letter with the date and the recipient’s name and address
• Include a salutation, such as “Dear [Name],”
• Write out the purpose of the letter in the opening sentence
• Explain the purpose and the desired outcome of the letter in detail
• Include any relevant legal information that may be necessary
• Make sure to include all of the pertinent facts and evidence to provide clarity
• End the letter with a formal closing, such as “Sincerely,”
• Sign and date the letter
• Make sure to include any additional information, such as a notarization or other legal measures

When you have completed the formatting and layout of your representation letter and it includes the necessary information, you can check this step off your list and move on to the next step.

• Have all parties signing the letter present at the same time in front of a notary public
• Each party should sign the letter in the presence of the notary
• Every signing party should also provide a valid form of identification
• The notary should also sign and date the letter
• Once all parties have signed and the notary has notarized the letter, it is legally binding
• After completing the steps above, you can be sure that the letter is valid and enforceable
• Now you can move on to the next step in the guide.
• Research the legal requirements and regulations in your jurisdiction to make sure the representation letter is legally binding
• Use precise and unambiguous language when drafting the letter, such as stating the exact obligations of each party
• Ensure the letter clearly outlines the roles, rights, and obligations of each party
• Include a signature line for both parties and make sure each signature is witnessed and notarized
• Check that the letter is dated accurately
• Once you have completed the steps above, you can be sure that the representation letter is legally binding and enforceable
• Gather any documents that will be used as evidence, such as contracts, agreements, or other documents that are relevant to the case.
• Collect any witness statements, including any written or verbal statements from people who can provide proof in the case.
• Assemble any other forms of proof, such as photographs, recordings, or other physical evidence.
• Make sure all information is organized and accessible for use in the representation letter.

Once you have collected all documents, evidence, and information, you can check this step off your list and move on to the next step.

• Understand the purpose of a representation letter. It is a document used to enter into an agreement between an individual or company and their representative.
• Learn the types of legal matters that require a representation letter. These may include negotiations, contract disputes, court proceedings, and more.
• Research the laws and regulations that apply to the specific situation. This will help you know what must be included in the representation letter.
• When you have gathered the necessary information and documents, you can proceed to drafting the representation letter.
• When the letter is written and signed, it is ready to be used in the legal proceeding.

You will know you have completed this step when you have gathered all the necessary information and documents, and have drafted the representation letter.

• Brainstorm and list out all of the responsibilities and obligations that the representative and the individual or company they are representing should fulfill
• Make sure to include the individual or company’s rights with respect to the agreement in the representation letter
• Review the list of responsibilities and obligations and make sure that all parties involved are comfortable with the terms
• Once all parties have agreed to the terms, add the details to the representation letter
• When the representation letter is complete, have all parties involved sign it
• Once all parties have signed the representation letter, it is legally binding and enforceable
• You will know this step is complete when all parties have signed the representation letter and the document is finalized.
• Research and understand the legal requirements for the representation letter, and the potential risks and consequences of not meeting these requirements.
• Consider the potential risks of not having a representation letter in place, such as enforcement of contract terms, liability for damages, or penalties for breach of contract.
• Consult a lawyer or other legal expert to ensure that you are aware of all the potential legal implications of not having a representation letter in place.
• Once you have a thorough understanding of the potential legal implications of not having a representation letter in place, move on to the next step.

• Draft the representation letter with a clear and concise legal language, making sure all the parties involved are named and referenced. • Ensure that the agreement is signed by all the parties involved, or their representatives. • Make sure that the agreement contains a specific and detailed description of the services or goods to be provided, including a timeline and payment structure. • Include clauses that detail the legal consequences of a breach of contract and dispute resolution. • Ensure that the letter is written in accordance with the applicable laws of the jurisdiction where the agreement is to be made. • Check that the agreement is clear and unambiguous, with no room for interpretation. • Check that the agreement is legally binding and that all parties have read and understood the contents.

You can check this off your list and move on to the next step once you have completed the above steps to ensure that the representation letter meets all legal requirements.

• Gather all relevant information needed for the representation letter, including the client’s name, address, and the reasons why legal representation is needed. • Make sure that the representation letter is written in a clear and professional manner, with all legal requirements stated clearly. • Ensure that the representation letter adheres to the laws of the state or jurisdiction where the representation letter is being used. • Include all relevant details that are necessary for the document, such as names, signatures, dates, and any other relevant information. • Double check that all the necessary information has been included and that the representation letter meets all legal requirements.

Once you have gathered the necessary information and double checked that the representation letter meets all legal requirements, you can check this off your list and move onto the next step.

Q: What is the difference between a representation letter and a legal opinion?

Asked by Sarah on October 1st, 2022. A: A representation letter is an agreement between two parties, while a legal opinion is an interpretation of the law given by a lawyer. A representation letter typically outlines the responsibilities of both parties, confirms the terms of an agreement, and makes any necessary representations about the accuracy of information or the ability of one party to perform its obligations. A legal opinion, on the other hand, is an analysis of applicable law which assesses the legal risks associated with a particular transaction or situation. It is often used to provide guidance on how to proceed in a certain situation.

Q: When do I need a representation letter?

Asked by James on December 12th, 2022. A: Representation letters are typically used to provide written confirmation that certain terms have been agreed upon between two parties. This can be useful when there may be a dispute in the future as to what was agreed upon. Representation letters can also be used to confirm that all necessary information has been disclosed and that all parties understand each other’s responsibilities. Representation letters can be used in many different contexts including contracts, investments, mergers and acquisitions, and joint ventures.

Q: What should be included in a representation letter?

Asked by Elizabeth on April 4th, 2022. A: A representation letter should include all relevant details about the two parties involved in the agreement and their respective roles and responsibilities. It should also include any representations made by either party about the accuracy of information or their ability to perform their obligations. Additionally, it should clearly state all agreed upon terms and conditions.

Q: How do I draft a representation letter for my business?

Asked by Michael on January 14th, 2022. A: Drafting a representation letter for your business should begin with understanding your specific needs and what you are trying to achieve with your document. You should then consider what types of representations you need to make, who will be involved in the agreement, and what types of terms and conditions need to be included. Once you have these details determined, you can begin drafting your representation letter using templates or software tools available online.

Q: How do I sign a representation letter?

Asked by Jessica on May 9th, 2022. A: The signing process for a representation letter will depend on the specific document requirements set out by your jurisdiction and applicable laws. Generally speaking, both parties must sign the document in order for it to be legally binding. Depending on your jurisdiction and applicable laws, this may require an original signature by each party or simply an electronic signature via an appropriate software tool or service provider.

Q: What are some common pitfalls when creating a representation letter?

Asked by Joshua on August 22nd, 2022. A: One common pitfall when creating a representation letter is not being clear enough about each party’s obligations or expectations from the agreement. It’s important to ensure that all relevant details are explicitly stated in order to avoid any potential misunderstandings or disputes down the road. Additionally, you should ensure that any representations made by either party are accurate and truthful as this could have legal implications if false information is provided. Finally, you should ensure that all applicable laws are taken into account when drafting your document in order to ensure compliance with those laws and regulations.

Q: What are some best practices when creating a representation letter?

Asked by Emily on November 17th, 2022. A: When creating a representation letter it’s important to ensure that all relevant details are explicitly stated so as to avoid any potential misunderstandings or disputes down the road. Additionally, it’s important to ensure that any representations made by either party are accurate and truthful as this could have legal implications if false information is provided. You should also ensure that all applicable laws are taken into account when drafting your document in order to ensure compliance with those laws and regulations. Finally, it’s important to take into account any potential unforeseen circumstances which could arise from your agreement so as to ensure that these situations are covered in your document if they occur in the future.

Q: Is there a difference between UK vs USA vs EU jurisdictions when creating a representation letter?

Asked by Hannah on February 23rd, 2022. A: Yes – there may be differences between jurisdictions when it comes to creating a representation letter depending on which country’s laws apply to your situation or agreement. Generally speaking though there are some common elements which must be included such as clearly stating each party’s obligations and ensuring that all applicable laws are taken into account when drafting your document in order to ensure compliance with those laws and regulations regardless of jurisdiction. Additionally, it’s important to check if there are any specific requirements under local law which must be taken into account when creating your document as well as ensuring that any representations made by either party are accurate and truthful as this could have legal implications if false information is provided regardless of jurisdiction too.

Q: Is it possible for me to create my own representation letter without involving an attorney?

Asked by Matthew on June 28th, 2022. A: Yes – it is possible for you to create your own representation letter without involving an attorney depending on the complexity of your situation or agreement as well as any specific requirements set out under local law which must be taken into account when creating your document. However it’s important to note that using an attorney may provide additional benefits such as providing advice regarding applicable legal risks associated with your particular transaction or situation as well as ensuring that all necessary information has been disclosed accurately and truthfully before signing off on any agreement or contract .

Q: Are there different types of representation letters I can create?

Asked by John on July 12th, 2022 A: Yes – there are different types of representation letters depending on what type of agreement you need for your particular situation or transaction such as contracts, investments, mergers & acquisitions, joint ventures etc… Each type of agreement will require different elements such as outlining each party’s roles & responsibilities as well as confirming all agreed upon terms & conditions etc… It’s important to understand what type of agreement you need before beginning drafting process so as make sure all necessary elements are included in order for it be legally binding if required later down the line .

Q: Can I use online services or software tools available online help me create my own representation letter?

Asked by David on September 18th 2022 A: Yes – there are online services available which can help you create your own representation letter depending on what type of agreement you need for your particular situation or transaction such as contracts, investments mergers & acquisitions , joint ventures etc… These services typically provide templates which allow you fill out relevant details about both parties involved in agreement such their roles & responsibilities , confirm agreed upon terms & conditions etc… Additionally , some services also allow you sign electronically via appropriate software tool or service provider .

Q: Does every industry have its own specific laws regarding creating a representation letter?

Asked by Ashley on March 8th 2022 A: No - not necessarily - while certain industries may have laws specific to them regarding creating a representation Letter , generally speaking most agreements will require same elements such outlining each party’s roles & responsibilities confirming terms & conditions etc… However , it’s important check whether there are any specific industry requirements need taken into account depending upon business model ( e . g . SaaS , technology , B2B ) , sector , jurisdiction etc… before beginning drafting process .

Example dispute

Suing a company over a representation letter.

• A plaintiff may sue a company for damages if they believe that the company has made false or misleading representations in a representation letter.
• The plaintiff must prove that the representations were false and that the company acted negligently or recklessly.
• The plaintiff must also show that the representations caused them to suffer some kind of financial loss or other harm.
• The plaintiff may be entitled to damages such as lost profits, attorney’s fees, or other costs associated with the lawsuit.
• The plaintiff may also seek an injunction or other equitable relief if the representation letter has caused irreparable harm.
• The court may also require the company to issue a corrective representation letter if the company has made false or misleading representations.

Templates available (free to use)

Rule 144 Seller S Representation Letter Non Affiliate Sale Of Restricted Securities Sas 72 Representation Letter

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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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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.

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.

In some cases, however, auditors may not have the option to apply some substantive audit procedures . However, that does not imply the auditor must not consider those areas. It also does not infer that auditors must provide a negative opinion regarding those areas. In these cases, auditors can also obtain a representation letter from the client’s management.

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.

It is a written statement written by auditors. This statement attests to the accuracy of the financial statements given to the auditors for analysis. Auditors present this letter to the client’s management, who signs the letter constructing a form of audit evidence. While this evidence is necessary, it may not represent sufficient appropriate audit evidence.

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?

A typical representation letter will include various areas to cover the auditors’ liability towards the audit assignment. It will also include areas to ensure the management is aware of its responsibility to prepare accurate financial statements. According to accountingtool.com , representation letters will cover the following areas.

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?

In some cases, auditors cannot obtain a reliable representation letter from the management. These may occur when the auditor has concerns about the competence, integrity, or diligence of the management. In these cases, the standards require auditors to determine the effect that such issues may have on the reliability of the representation letters.

When auditors obtain representation letters that are inconsistent with other audit evidence, they must perform procedures to resolve any discrepancies. If they cannot do so, they will need to reconsider the prior assessment of the client’s management. The auditors must also determine the effects such circumstances will have on the reliability of the representation letter or the audit assignment.

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.

Representation letters are a form of written representation and constitute an essential part of audits. These letters attest to the accuracy of the financial statements presented by the client’s management. There are several areas which representation letters cover. If auditors cannot obtain reliable representation letters, they will need to evaluate the situation and take appropriate actions.

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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.

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.

14+ Management Representation Letter Format, What is It, Examples

• Letter Format
• January 24, 2024
• Business Letters , Contract Letters , Legal Letters

Management Representation Letter Format : A management representation letter format is a formal document used by auditors to obtain written confirmation from management about certain financial and non-financial matters . The Business letter is an important part of the audit process as it helps auditors gain a better understanding of the client’s business operations, accounting policies, and financial reporting practices .

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Management Representation Letter Format

Content in this article

The management representation letter format is typically including the following components:

• Opening Paragraph: The Legal letter begins with a formal greeting and an explanation of the purpose of the letter. It may also include the date of the audit and the reporting period.
• Responsibilities of Management: This section outlines the responsibilities of management in relation to the financial statements and the audit process. It confirms that management is responsible for the preparation and presentation of the financial statements in accordance with accounting principles, maintaining adequate internal controls, and providing the auditor with access to all relevant information.
• Representations: This is the main body of the letter, where management makes specific representations about various financial and non-financial matters. These may include statements about the completeness and accuracy of financial statements, compliance with laws and regulations, the absence of fraud, and the adequacy of internal controls.
• Closing Paragraph: The Contract letter concludes with a statement confirming that management has disclosed all relevant information to the auditor and that the representations made in the letter are true and accurate.

It is important to note that the management representation letter Format is a legal document and should be drafted with care. Management should review the letter carefully before signing it, as they are legally responsible for the accuracy of the information provided.

In addition to providing auditors with important information about the client’s business, the management representation letter can also serve as a valuable communication tool between management and the auditor . It can help to identify potential issues early in the audit process and facilitate a smoother and more efficient audit.

Management Representation Letter Format – Sample Format

Below is a Sample Format of Management Representation Letter Format:

[Your Company Letterhead]

[External Auditor’s Name]

[External Auditor’s Firm]

[Address Line 1]

[Address Line 2]

[City, State, ZIP Code]

Dear [External Auditor’s Name],

Re: Management Representation Letter

We appreciate the opportunity to work with your firm in connection with the audit of the financial statements of [Your Company Name] for the fiscal year ended [Date]. In connection with your audit, we are providing you with this representation letter.

We, the management of [Your Company Name], confirm the following representations:

• The financial statements have been prepared in conformity with the generally accepted accounting principles (GAAP) and present fairly the financial position, results of operations, and cash flows of the company.
• Management is responsible for establishing and maintaining effective internal control over financial reporting, and there have been no significant changes in the internal control over financial reporting that could have a material effect on the company’s ability to record, process, summarize, and report financial data.
• To the best of our knowledge, there has been no fraud or illegal acts that have materially affected or are reasonably likely to materially affect the financial statements.
• Except as disclosed in the financial statements or in the notes thereto, there are no pending or threatened legal actions, claims, or assessments that could have a material effect on the financial statements.
• All significant information and documentation related to the company’s operations and financial transactions have been made available to your firm.
• We have disclosed all significant events occurring after the balance sheet date that would require adjustment to, or disclosure in, the financial statements.

This representation letter is provided to you in connection with your audit of the financial statements of [Your Company Name] and should be read in conjunction with the auditor’s report. We acknowledge our responsibility for the design and implementation of internal controls to prevent and detect fraud, as well as the preparation of financial statements.

Please let us know if you need any further information or clarification. We appreciate your professional services and look forward to a successful audit.

[Your Name]

[Your Title]

[Your Company Name]

[Your Contact Information]

This is a general template for a management representation letter. Specific content may vary based on the company’s circumstances and the requirements of the external auditor. It is advisable to consult with legal and accounting professionals when preparing such letters.

Email Ideas about Management Representation Letter Format

Here’s an Email Ideas for Management Representation Letter Format:

Subject: Request for Management Representation Letter

Dear [Manager’s Name],

I am writing to request your assistance in providing a management representation letter format to complete our audit process. As you are aware, the management representation letter is a crucial document that provides written confirmation from management on the accuracy and completeness of financial statements and related disclosures.

The representation letter helps our auditors to obtain evidence in support of the financial statements and to obtain assurance that management has fulfilled its responsibilities. It also serves as a tool for our auditors to document the representations made by management during the course of the audit.

We would appreciate it if you could provide the management representation letter as soon as possible, but no later than [date]. We understand that the process of preparing this letter can take some time and we are available to discuss any questions or concerns you may have.

Please let us know if you need any further information or assistance in preparing the letter. We appreciate your cooperation and look forward to completing the audit process.

Thank you for your attention to this matter.

Management Representation Letter Format to Auditor

This letter, presented to auditors, formalizes the company’s commitments, affirming the accuracy of financial data, adherence to accounting standards, and cooperation with auditors to ensure a transparent and accurate audit process.

We appreciate the opportunity to collaborate with your firm for the audit of the financial statements of [Your Company Name] for the fiscal year ended [Date]. In connection with the audit, we are pleased to provide you with the following representations:

• The management of [Your Company Name] is responsible for the preparation and fair presentation of the financial statements in conformity with the generally accepted accounting principles (GAAP).

Should you require any further information or clarification, please do not hesitate to contact us. We appreciate your professional services and look forward to a successful audit.

This letter is a general format for a management representation letter to an auditor. Specific content may vary based on the company’s circumstances and the requirements of the external auditor. Always consult with legal and accounting professionals when preparing such letters.

Management Representation Letter Format to Bank

This Management Representation Letter Format serves to affirm the accuracy of financial information, adherence to credit terms, and compliance with agreements, fostering transparency in the company’s dealings with the bank.

[Bank Name]

[Bank Address Line 1]

[Bank Address Line 2]

Dear [Bank Manager’s Name],

Re: Management Representation Letter for Banking Purposes

We hereby provide this Management Representation Letter in connection with our banking relationship with [Bank Name]. This letter is to confirm certain representations to assist the bank in its assessment of our financial standing and creditworthiness.

• We confirm that the financial statements provided to the bank are prepared in accordance with generally accepted accounting principles (GAAP) and present fairly our financial position as of [Date].
• All information provided regarding our credit facilities, loans, and guarantees is accurate, complete, and reflective of our current financial obligations to the best of our knowledge.
• We confirm that we are in compliance with all terms and conditions outlined in our loan agreements, credit facilities, and any other financial arrangements with the bank.
• We have disclosed any material changes in our financial condition, business operations, or other relevant matters that may impact our ability to meet our financial obligations to the bank.
• There are no pending or threatened legal proceedings, disputes, or litigation that could materially affect our ability to fulfill our financial commitments to the bank.
• The undersigned individuals have the authority to provide these representations on behalf of the company, and all necessary corporate approvals have been obtained.

This Management Representation Letter is provided solely for the purpose of supporting our banking relationship with [Bank Name]. We acknowledge our responsibility to promptly inform the bank of any material changes that may affect the accuracy of these representations.

If you require any additional information or documentation, please do not hesitate to contact us. We appreciate your continued support and understanding.

This Management Representation Letter to the bank is a formal document confirming key financial and operational details. Customize it as needed based on your specific banking relationship and requirements.

Management Representation Letter Format – Template

Here’s a Template of Management Representation Letter Format:

[Company Letterhead]

[External Auditor Name] [External Auditor Address] [External Auditor City, State ZIP Code]

Dear [External Auditor Name],

We are pleased to provide you with this management representation letter in connection with the audit of our financial statements for the year ended [Date]. As management of [Company Name], we acknowledge our responsibility for the preparation and presentation of the financial statements in accordance with generally accepted accounting principles.

We confirm that we have provided you with all relevant information necessary for the audit and that we have disclosed all known or suspected fraud, illegal acts, or non-compliance with laws and regulations that may have a material effect on the financial statements.

We represent that the financial statements are complete and accurate, and that they fairly present, in all material respects, the financial position of [Company Name] as of [Date], and the results of its operations and cash flows for the year then ended.

We also confirm that the representations made in this letter are true and accurate as of the date of this letter.

[Your Name] [Your Title] [Your Company Name]

Management Representation Letter for External Audit

This letter reinforces the company’s commitment to transparency, providing essential assurances to external auditors regarding the accuracy of financial information and cooperation throughout the audit, crucial for ensuring the integrity of the audit process.

[Audit Firm Name]

[Audit Firm Address]

Re: Management Representation for the External Audit of [Company Name]

We, the undersigned management of [Your Company Name], hereby provide this letter to confirm certain representations in connection with the external audit of our financial statements for the fiscal year ending [Date].

• We confirm that the financial statements, including the balance sheet, income statement, and cash flow statement, present a true and fair view of the financial position of [Your Company Name] as of [Date].
• The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) [or International Financial Reporting Standards (IFRS)].
• We have established and maintained effective internal controls to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with applicable accounting standards.
• All significant information and disclosures related to our operations, financial position, and business transactions that may affect the understanding and interpretation of the financial statements have been disclosed to the best of our knowledge.
• All assets and liabilities, including contingent liabilities, have been properly recorded and disclosed in the financial statements.
• We have disclosed to you all known and potential legal claims, disputes, and litigations that may have a material impact on the financial statements.
• We acknowledge our responsibility to provide you and your team with complete access to all information and documents requested during the audit process.
• We confirm that there have been no changes in accounting policies or practices that materially affect the financial statements without appropriate disclosure.

This letter is provided solely for the purpose of supporting the external audit of our financial statements. We understand the importance of your audit in providing assurance to our stakeholders, and we commit to providing all necessary cooperation throughout the audit process.

If you require any additional information or clarification, please do not hesitate to contact us.

This Management Representation Letter for an external audit assures the auditor of the accuracy and completeness of financial statements, compliance with accounting standards, and cooperation during the audit process. Customize it as per your specific company and audit requirements.

Management Representation Letter to Investors

This letter serves as a transparent communication tool, instilling confidence among investors by affirming the company’s commitment to sound financial practices, compliance, and overall business stability.

[Investor’s Name]

[Investor’s Company/Organization]

[Investor’s Address]

Dear [Investor’s Name],

Re: Management Representation Letter to Investors

We, the undersigned management of [Your Company Name], are pleased to provide this letter to investors to affirm certain key aspects of our operations and financial position. This representation is made as of [Date] in connection with your investment in our company.

• We confirm that the financial statements provided to investors accurately represent the financial position of [Your Company Name] as of [Date]. The statements have been prepared in accordance with generally accepted accounting principles (GAAP) [or International Financial Reporting Standards (IFRS)].
• The management assures investors that the operational performance of the company is in line with the disclosed business plans and strategies. Any material changes have been duly communicated.
• We confirm that the company is in compliance with all applicable laws and regulations relevant to its operations. Any deviations have been appropriately addressed or disclosed.
• All material contracts and agreements that may impact the company’s financial position have been accurately disclosed to investors. There have been no material breaches of these contracts.
• The management has disclosed all known risk factors that may materially affect the company’s financial position or future prospects. We are committed to proactive risk management.
• Funds invested by our esteemed investors have been utilized in accordance with the stated purposes and business plans as communicated during the investment process.
• Any forward-looking statements made by the management are based on reasonable assumptions. However, actual results may vary, and the company is not obligated to update these statements.
• The management is dedicated to maintaining open lines of communication with investors. Any significant developments or changes in the company’s status will be promptly communicated.

This letter is intended to provide additional assurance and transparency to our valued investors. We appreciate your trust in [Your Company Name] and remain committed to creating value and fostering a mutually beneficial partnership.

If you have any questions or require further clarification, please do not hesitate to contact us.

This Management Representation Letter to Investors affirms key aspects of the company’s financial position, operational performance, and commitment to transparency, providing reassurance to investors about their investment in the company. Customize it as per your specific company and investor relations.

Management Representation Letter to Regulators

This letter serves as a formal commitment from the company’s management to regulatory bodies, ensuring transparency, accountability, and adherence to regulatory requirements, thereby fostering trust and regulatory compliance.

[Regulatory Authority Name]

Subject: Management Representation Letter

Dear [Regulatory Authority Name],

Re: Management Representation for Compliance with [Applicable Laws/Regulations]

We, the undersigned management of [Your Company Name], hereby provide this letter to confirm our commitment to compliance with all applicable laws, regulations, and industry standards under the jurisdiction of [Regulatory Authority Name].

• We affirm that our company operates in full compliance with all relevant laws and regulations governing our industry and business operations.
• The financial statements of [Your Company Name], including the balance sheet, income statement, and cash flow statement, have been prepared in accordance with applicable accounting standards, providing a true and fair view of the company’s financial position.
• We have established and maintained effective internal controls to ensure the accuracy and reliability of financial reporting and compliance with regulatory requirements.
• All material information, events, and transactions that may affect the company’s compliance status or financial position have been transparently disclosed.
• We commit to timely and accurate filing of all required reports, statements, and documentation as per the regulations enforced by [Regulatory Authority Name].
• We acknowledge our responsibility to fully cooperate with any regulatory inspections or inquiries that may arise, providing all necessary information and documentation as requested.
• Our management is dedicated to continuous improvement in our compliance practices, ensuring that we stay abreast of any changes in laws or regulations that may impact our business.

This letter is provided for the purpose of assuring [Regulatory Authority Name] of our dedication to compliance and transparent business practices. We understand the importance of regulatory oversight in maintaining market integrity and protecting the interests of stakeholders.

This Management Representation Letter to Regulators emphasizes the company’s commitment to compliance with applicable laws and regulations, providing assurance to regulatory authorities and fostering transparency in business operations. Customize it based on your specific company and regulatory requirements.

Management Representation Letter Format – Example

Here’s an Example of Management Representation Letter Format:

As management of [Company Name], we acknowledge our responsibility for the preparation and presentation of the financial statements in accordance with generally accepted accounting principles. We understand that you will be conducting an audit of our financial statements for the year ended [Date].

We confirm that we have disclosed all known or suspected fraud, illegal acts, or non-compliance with laws and regulations that may have a material effect on the financial statements. We also confirm that we have provided you with access to all relevant information necessary for the audit.

We understand that this letter is a legal document and that we are responsible for the accuracy of the information provided. We confirm that the representations made in this letter are true and accurate as of the date of this letter.

Management Representation Letter Format – Example 

Formal Management Representation Letter Format

This Management Representation Letter Format serves to provide external auditors with essential assurances from management regarding the accuracy and completeness of financial information, adherence to legal and regulatory requirements, and the effectiveness of internal controls.

Re: Management Representation for [Year/Period] Ended [End Date]

We, the undersigned management of [Your Company Name], are providing this letter to confirm certain representations made to you during the audit of our financial statements for the [Year/Period] ended [End Date].

• We acknowledge our responsibility for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework.
• To the best of our knowledge and belief, the company has complied with all relevant laws and regulations that may materially affect the financial statements.
• We have established and maintained effective internal control over financial reporting, and any identified deficiencies have been disclosed to you.
• We have made you aware of any known or suspected instances of fraud or illegal acts affecting the company.
• All related party transactions have been accurately identified, disclosed, and recorded in accordance with the applicable financial reporting framework.
• We have disclosed to you all known actual or potential litigation and claims that may have a material effect on the financial statements.
• We have assessed the company’s ability to continue as a going concern and disclosed any uncertainties related to going concern appropriately.
• The information provided to you during the audit is complete and accurate, and we have disclosed all significant matters relevant to the financial statements.

This representation is provided to assist you in obtaining reasonable assurance that the financial statements are free from material misstatement. If there are any additional matters or information you require, please contact us promptly.

We appreciate your professional services and look forward to a successful completion of the audit.

This Formal Management Representation Letter Format is designed to provide external auditors with assurances on various aspects related to financial statements, compliance, internal controls, and more. Customize it based on your specific company and audit requirements.

Fraud and Illegal Acts Representation Letter

This letter underscores the company’s dedication to integrity and transparency, outlining measures taken to prevent and address fraudulent activities, and providing assurances to external auditors regarding compliance with legal and ethical standards.

Subject: Representation Regarding Fraud and Illegal Acts

Re: Fraud and Illegal Acts Representation

We, the undersigned management of [Your Company Name], hereby provide this representation regarding the prevention, detection, and reporting of fraud and illegal acts within the organization for the [Year/Period] ended [End Date].

• We acknowledge our responsibility for the prevention and detection of fraud and illegal acts within the organization.
• We have established and maintained internal controls and procedures designed to prevent and detect fraud and illegal acts.
• Employees are provided with adequate training and awareness programs to understand the risks associated with fraud and illegal acts and are encouraged to report any concerns through appropriate channels.
• We have communicated ethical standards and expectations to all employees, emphasizing our commitment to conducting business with integrity and in compliance with applicable laws and regulations.
• Any known or suspected instances of fraud or illegal acts are promptly reported to the appropriate levels of management and, if necessary, to the board of directors.
• In the event of identified fraud or illegal acts, we conduct thorough investigations and implement remedial actions, including disciplinary measures and corrective measures to prevent recurrence.
• We have established mechanisms to protect whistleblowers from retaliation and encourage the reporting of concerns without fear of reprisal.
• We commit to cooperating fully with external authorities, including law enforcement agencies and regulatory bodies, in the investigation of fraud or illegal acts.
• All representations made to you regarding the prevention, detection, and reporting of fraud and illegal acts are accurate and complete.

This representation is provided to assist you in obtaining reasonable assurance that the financial statements are free from material misstatement, including those resulting from fraud or illegal acts.

If you have any questions or require further clarification on any matters related to fraud and illegal acts, please do not hesitate to contact us.

This Fraud and Illegal Acts Representation Letter is designed to assure external auditors of the company’s commitment to preventing, detecting, and reporting fraud and illegal acts. Customize it based on your specific company policies and procedures.

FAQS About Management Representation Letter Format, What is It, Examples

What is a management representation letter format.

A Management Representation Letter Format is a formal document issued by a company’s management to external auditors, confirming certain representations related to financial statements, compliance, internal controls, and other crucial aspects during an audit.

What is the Purpose of a Management Representation Letter Format?

The primary purpose is to provide external auditors with written representations from management regarding various aspects of the company’s operations. Management Representation Letter Format helps auditors obtain assurance on the accuracy and completeness of financial information and other relevant matters.

What Information is Typically Included in a Management Representation Letter Format?

The Management Representation Letter Format typically includes representations related to financial statements, compliance with laws and regulations, internal controls, fraud and illegal acts, related party transactions, litigation, and the going concern assumption.

Why is a Management Representation Letter Format is Important in an Audit?

The Management Representation Letter Format is crucial as it formalizes management’s acknowledgment of its responsibilities and provides auditors with assurances on key matters. It enhances the audit process by obtaining explicit confirmations from management regarding the information and processes being audited.

Is a Management Representation Letter Standardized?

While there are common elements, the letter is often customized to suit the specific circumstances and requirements of the company and the audit. It may vary in content based on industry practices, regulatory requirements, and the auditor’s specific requests.

Are There Risks Associated with Providing Management Representation Letter Format?

Yes, Management Representation Letter Format, there are risks, and management should carefully consider the accuracy of the representations made. Providing false or misleading information in the representation letter can have legal and financial consequences.

The Management Representation Letter Format is a formal document that serves as an important part of the audit process . It outlines the responsibilities of management and makes specific representations about various financial and non-financial matters. The Management Representation Letter Format should be carefully reviewed and signed by management to ensure that the information provided is accurate and complete .

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What is a Management Representation Letter?

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Management representation letter.

A Management Representation Letter is a document written by the management of a company and provided to its auditors. This letter is part of the audit process and it’s typically required at the end of an audit engagement.

The purpose of a Management Representation Letter is to confirm the accuracy and completeness of the information that management has provided to the auditors. It’s a formal acknowledgement that the financial statements and other related information are true, complete, and correctly presented to the best of the management’s knowledge.

The letter covers various items including:

• Assertions : Management confirms that all financial records , data, and other relevant information have been made available to the auditor and are complete and accurate.
• Fraud and Irregularities : Management confirms that they have disclosed any known frauds or suspected frauds affecting the company, as well as any allegations of fraud or suspected fraud.
• Laws and Regulations : Management asserts that the company has complied with all laws and regulations that could have a significant effect on the financial statements .
• Subsequent Events : Management provides information on any events after the balance sheet date that may need to be disclosed in the financial statements or notes.
• Unrecorded Liabilities : Management asserts that there are no material liabilities, contingent or otherwise, that are not disclosed in the financial statements .

The Management Representation Letter helps the auditor obtain written confirmation of representations from management, which can be crucial when forming an audit opinion . It’s worth noting that while this letter is important, it does not relieve the auditor of the responsibility to gather sufficient appropriate audit evidence to form an audit opinion.

Example of a Management Representation Letter

Here is an illustrative example of what a Management Representation Letter might look like. Please note that actual letters would be more detailed and would vary depending on the specifics of the company and the audit.

[Company Letterhead]

[Auditor’s Name and Address]

Dear [Auditor’s Name],

In connection with your audit of the financial statements of [Company’s Name] as of [Financial Year End Date], and for the year then ended, we confirm, to the best of our knowledge and belief, the following representations:

• We have made available to you all financial records and related data, as well as all minutes of meetings of shareholders and the board of directors and its committees.
• We believe that the effects of uncorrected financial statement misstatements aggregated by you during the audit are immaterial, both individually and in the aggregate, to the financial statements as a whole.
• There have been no irregularities involving management or employees who have significant roles in internal control or that could have a material effect on the financial statements .
• We have complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of noncompliance.
• There have been no events subsequent to the balance sheet date that would require adjustment to, or disclosure in, the financial statements .

We acknowledge our responsibility to design, implement, and maintain internal control to prevent and detect fraud .

Yours sincerely,

[Chief Executive Officer]

[Chief Financial Officer]

Again, this is just a basic example. A real Management Representation Letter would be tailored to the specific situation and would cover all areas that are relevant to the audit.

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Understanding an Audit Letter of Representation (LOR)

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.

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.

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.

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.

Related Posts:

• Understanding Audit Procedures: A Guide to Audit Methods & Test of Controls
• Audit Risk 101: An Auditor’s Guide to Understanding Audit Risk 
• PII, PHI, PCI: Understanding the Differences for Compliance
• What Do Auditors Do? Understanding an Auditor’s Responsibilities
• Understanding the Entity & Its Environment: Why It’s Important For SOC 2
• Understanding the HITRUST CSF: A Guide for Beginners

• Attorney Letter of Representation - Examples & Legal Advice

Attorney Letter of Representation (Examples & What Should Include?)

What should an attorney letter of representation include, attorney letter of representation example, what happens after a letter of representation, what is an attorney letter of non-representation, what is a drop letter, get a free lawsuit evaluation with our lawyers.

Table Of Contents

A good attorney letter of representation should contain the following information:

• Your attorney’s name and contact information
• The reason for legal representation
• A summary of the facts of your case
• An explanation of your injuries (in an accident case), and
• An inquiry into insurance policy limits (if an accident or personal injury case).

Date Name of party Business/entity title Business address

Re: Our Client: Your Insured: Date of Accident:

Dear ______:

Please be advised that this office represents the above-named individual for the injuries sustained as a result of an automobile accident with your insured. Your client ran a red light with multiple witnesses. I do not suspect you will dispute responsibility.

I will forward you the medical bills and reports for my client as soon as they become available. We will keep you posted on significant treatment developments.

Also, please inform me of the policy limit on your insured’s vehicle and let me know of any other applicable insurance coverages that might pertain to this claim. I have a concern that this is a policy limits case.

If you have any questions or concerns about this claim, please contact me at your convenience.

Name of attorney

Once your attorney sends the letter, you will not need to correspond with the claims adjuster. Your attorney will handle all aspects of your claim on your behalf. If an adjuster does contact you after the letter is sent, tell them that they will need to speak with your attorney.

An Attorney letter of non-representation is used to advise an attorney’s client and other parties to a transaction or litigation that the attorney represents only the attorney’s client and does not represent, and will not provide legal services for, other parties.

A drop letter is intended to announce that the relationship is no longer continuing and to refer the client to another attorney. In the disengagement letter, the attorney should warn the client of applicable time limitations, deadlines, and uncompleted investigation or casework.

Related Articles :

• Do You Want to File a Civil Lawsui t?
• How Do Personal Injury Lawyers Negotiate Settlements ?
• What Is Legal Standing ?

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03 Apr What are Management Representation Letters?

In the world of assurance engagements, a management representation letter is a formal document that represents management’s agreement with the financial statements that are being audited or reviewed. This letter is a critical part of the assurance engagement process and is required by the auditor or reviewer as evidence that management acknowledges and accepts responsibility for the financial statements.

A management representation letter is typically issued by senior management, such as the CEO or CFO, and is addressed to the CPA firm performing the audit or review. It contains a series of statements that confirm certain facts and assurances about the company’s financial information, including the completeness and accuracy of financial records, disclosures of relevant information, and adherence to accounting principles.

The letter serves several purposes, including:

• Confirming the accuracy of financial information : The management representation letter is used to confirm that the financial statements are accurate and complete. This helps provide assurance to stakeholders that the financial statements are reliable.
• Demonstrating management’s responsibility : By signing the letter, management acknowledges its responsibility for the accuracy and completeness of the financial statements. This helps to provide accountability and transparency to stakeholders.
• Providing evidence for auditors and reviewer s: The management representation letter provides evidence to the CPA firm that management has taken responsibility for the financial statements, which helps to support the audit opinion or review conclusion.
• Reducing the risk of misstatements : The letter helps to reduce the risk of misstatements by requiring management to review the financial statements and provide assurance that they are accurate and complete.

Overall, the management representation letter is a critical part of the assurance engagement process, as it helps to provide assurance that the financial statements are accurate and complete, and that management takes responsibility for them. Without this letter, CPA firms would not have the necessary evidence to support their opinions and conclusions, which could lead to a lack of confidence in the financial statements and potential legal and financial consequences for the company. In fact, CPA firms are not permitted to complete their engagement and issue an audit or review engagement report until management provides a signed management representation letter.

If you require an audit or review and would like to speak to someone about these processes, please contact us to set up a free consultation.

Jennifer Scott

Cpa, cga – senior manager.

Jennifer Scott, a Senior Manager at Clearline brings a wealth of expertise in Private Enterprise and Assurance, holding designations as a CPA and CGA. Jennifer’s focus at Clearline includes conducting reviews, compilations, and providing tax services tailored to owner-manager businesses and partnerships, with a keen interest in industries such as professionals, manufacturing, real estate, and services. Her commitment to exceptional client service is evident through her proactive approach to staying updated on evolving accounting standards and tax legislation, thereby making her clients’ lives easier Jennifer’s educational background includes a Bachelor of Commerce from UBC with a major in Accounting, followed by over 15 years of experience in public practice, specializing in private enterprise. She appreciates the supportive environment at Clearline and enjoys various activities outside of work, including travelling, cheering on her children in sports like soccer, baseball, and volleyball, indulging in long walks with her dog while listening to podcasts, spending quality time with loved ones, and exploring her passion for baking through experimenting with new recipes.

Charmaine Pirrie

Cpa, ca(sa) – senior manager.

Charmaine Pirrie, a Senior Manager at Clearline is a CPA and CA (SA) with a background in audit and review engagements. With experience from Grant Thornton and D&Co, she brings expertise in private company audits and values Clearline’s supportive environment and technical resources. Charmaine also finds fulfillment in delving into her clients’ businesses to provide tailored services, ensuring meticulous audit and review procedures. Outside of work, she enjoys spending time with family, going for walks, and swimming.

Deepeka Dhillon

Cpa – manager.

Deepeka Dhillon, a Manager at Clearline, holds a CPA designation with a focus in Private Enterprise and Tax. Her primary responsibilities include compliance, corporate restructuring, and, estate and succession planning. Deepeka’s passion lies in continuous learning, enabling her to provide tailored solutions to clients’ unique needs. With a CPA designation and completion of the CPA in-depth tax program, she brings a strong educational background to her role at Clearline. Deepeka values the countless opportunities at Clearline to expand her knowledge in the complex world of tax. Outside work, she enjoys spending time with her beloved Jack Russell Terrier, Opie.

Raj Momrath

Cpa, ca, senior tax manager.

Raj Momrath, a Senior Tax Manager at Clearline, is a CPA, CA specializing in Canadian Tax. With a focus on Canadian tax planning, corporate reorganizations, estate planning, and providing business advice, Raj caters to a diverse clientele, including small owner-manager companies, high-net-worth individuals and large privately held multinational firms. His passion lies in helping Canadian owner-manager businesses and their shareholders minimize their overall tax obligations while navigating disputes with the Canada Revenue Agency and ensuring compliance with the complex Canadian tax system. Raj’s professional journey includes prior experience in PwC’s tax group, where he obtained his Chartered Accountant designation and then some time at some mid-sized firms. Raj completed the CPA Canada InDepth Tax course in 2017 strengthening his knowledge of Canadian tax. At Clearline, Raj appreciates working alongside knowledgeable colleagues and enjoys spending quality time with his wife and two sons and attending and volunteering with their sports activities. In his leisure time, Raj indulges in barbequing, golfing, and spending time outdoors, finding relaxation and enjoyment in these pursuits.

Julia Wallis

Julia Wallis, a Senior Manager at Clearline, holds designations as a CPA, CGA, and also holds a BA. Working within the Private Enterprise Group, her primary focus revolves around assisting entrepreneurs in understanding their personal and business finances while ensuring compliance with tax reporting requirements. Julia finds fulfillment in learning about her clients’ businesses and providing financial insights to enhance their management effectiveness while optimizing tax strategies. With a diverse career spanning various companies and public practice roles, including as a controller, Julia’s progression has equipped her with invaluable skills and insights into different business operations. She chose Clearline for its respected partners and staff, aligned philosophy on client service, and flexibility to balance demanding tax filing periods with leisure time for travel and personal interests such as gardening, wine exploration, reading, and relaxation.

Annelie Vistica

Cpa, ca – principal.

Annelie Vistica, a Principal at Clearline, is a CPA and CA with a strong background in private enterprise and assurance. With a Bachelor of Accountancy from the University of Stellenbosch in South Africa and extensive experience in tax, Annelie brings expertise in business setup, growth planning, and estate transitioning. She is passionate about engaging with clients to support them through various business stages, from inception to succession planning. Annelie values the supportive environment at Clearline, where she appreciates colleagues’ assistance in tax and assurance. Outside work, she enjoys spending time with her family and dog, exploring nature, visiting family in the Okanagan, and travelling the world.

Bilal Kathrada

Cpa, ca, principal.

Bilal, a Principal at Clearline Chartered Professional Accountants, primarily focuses on income tax and succession planning for Canadian owner-managed businesses in various industries. Bilal received his Bachelor of Commerce degree from the University of Victoria and obtained his CA designation in 2005.

Prior to Clearline, he worked in the tax group of a large international accounting firm in Vancouver and a mid-sized accounting firm located in the Fraser Valley.

Outside of the office, he enjoys spending time with his wife and three children. He enjoys outdoor activities such as golf and spending time with his family and friends.

Danny Sandhu

Cpa, manager.

Bio coming soon.

Shehzel Saif

Cpa, tax manager.

As Clearline’s Tax Manager, Shehzel focuses on tax planning, corporate reorganizations and succession and estate planning. She’s passionate about continuous learning and staying up to date on tax legislation changes and helping clients with succession. In addition to her CPA designation, Shehzel also has a Bachelor of Business Administration and has completed the CPA In-Depth Taxation Program. Outside of work, she enjoys spending time with family and friends, traveling and trying out new recipes.

Ameeta Randhawa

As Clearline’s HR Manager, Ameeta supports our firm’s greatest resource—our staff. With a Bachelor of Business Administration in Human Resources and over 7 years of HR experience in various industries, she ensures all employees have a positive experience at Clearline. Ameeta’s focuses include recruitment, performance management, employee relations, program and policy development, and employee engagement. Outside of work, she enjoys traveling and spending time with friends and family.

CPA, CA, Senior Manager

Michael is a Senior Manager in Private Enterprise, carrying out reviews, compilations, and tax services for small- to medium-sized businesses. With a Bachelor of Commerce specializing in finance and a Diploma in Accounting, backed by over a decade of accounting experience, Michael is a trusted advisor who helps clients’ businesses succeed. Outside of the office, Michael enjoys spending time with family, trying out different restaurants in the city, and building and collecting mechanical keyboards.

CPA, CGA, Manager

Victor K. Yoshida

Victor was born and raised in Vancouver and obtained his Bachelor of Commerce from the University of British Columbia. He articled with Deloitte & Touche and received his CA designation in 1984. Victor was accepted to the firm’s tax group and went on to complete the Canadian Institute of Chartered Accountants In-Depth Tax course.

Victor specializes in Canadian income tax issues for professional and owner-managed businesses. He has extensive experience with business succession, estate planning, wealth preservation issues, corporate reorganizations, as well as mergers and acquisitions.

Victor was a member of the education committee of the Institute of Chartered Accountants of British Columbia and has held executive positions with various amateur sport organizations.

In his free time, Victor enjoys training for marathons, travelling, and spending time with his family.

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Don’t Just Sign On The Dotted Line

The moment your audit team walks through the door you’re probably already thinking about how you can quickly give them the information they need so they can get in, get out and leave you alone to go back to your regularly scheduled work week. So, to speed up the process, you proactively pull supporting documentation and make yourself available to answer any questions that may arise. Finally, after a few days, your auditors say they’ve seen enough, pack up their gear and head out the door. Now all that’s left to do is wait.

Don’t put your guard down just yet. After bending over backward to ensure that your audit team’s requests were met, you will learn that there is one last thing to sign before the final report can change hands – a representation letter.

It’s tempting to blindly sign this document. After all, you’ve already been through the hard part. So it seems pretty silly to let a single signature stand between you and the final report – your sole reason for enduring the audit process in the first place. But before you do, hold it right there …

Never sign anything you don’t completely understand.

Here’s The Deal …

The Auditing Standards Board, in its overall audit guidance standards, calls for auditors to obtain specific written audit representations. So, no, your audit team isn’t just making you sign a random document because they feel like it or because they are trying to trip you up. It is part of required audit procedures, but you should always know – and understand – what you’re signing.

Read Also: Preparation Is Key When It Comes To An Audit

Did You Know:

By signing this letter, you indicating that you’ve been fully forthcoming about all in-year activity, all subsequent to date activity and any future planned activity..

While this may be a major “well duh!” moment for you, it bears repeating that if there is something you are aware of that didn’t come up during conversations with your auditors, the time to discuss it is now – before you put pen to paper. For example, if a decision to sell or terminate the entity has occurred or if a compliance failure has resulted in major fines, the audit team will need to be made aware of these facts for their full review of the situation.

By signing this letter, you are accepting your responsibility for the financial statements?

Even if the auditors have assisted in, or completed, the preparation of the financial statements, management is responsible to make sure all financial statements (including disclosures) are a fair presentation of the current position and activity of the entity. If you even have a twinge of uncertainty, it may be beneficial to discuss this representation with your audit team, who can assist you with understanding the financial statements as a whole.

By signing this letter, you are representing that you have evaluated any uncorrected financial statement misstatements compiled by the audit team?

The audit team has provided a list of these identified misstatements and, on their end, do not believe posting them would impact the reader of the financial statements. But, it’s ultimately your responsibility to make the final determination. So, if you don’t fully understand how these misstatements were identified and how they could impact the financial statements on an individual and aggregate basis, you will want to request further explanation from your audit team.

These are only a few of the representations you will come across within the letter, but there will almost certainly be many more. At this point, you may be thinking it’s best if you don’t sign anything at all. But because the Accounting Standards Board specifically identifies that management’s refusal to furnish these required representations constitutes a limitation on the scope of the audit sufficient enough for the auditor to disclaim an opinion or even withdraw from the engagement entirely – you don’t want to do that either.

Ultimately, your best option is to discuss the letter with your audit team and ask questions on anything you do not understand. Then you can be fully confident when the time comes to complete this one last request.

Email Rea & Associates to learn more about representation letters or to learn more about what you can expect when you working with Rea’s retirement plan audit team.

By  Darlene Finzer, CPA, CSA, QKA  (New Philadelphia office)

Check out these great articles for more retirement plan insight:

‘More, More, More’ Is Not Always Better

Avoid Audit Issues, Substantiate Your Hardship Distribution Claims

Accounting and Finance

Representation letter in auditing

Representation letter is used by auditor to get confirmation from audit client that they have been fair in providing all the relevant information/explanation to the auditor and they understand their responsibility.

The auditor issues a representation letter, and management or audit client needs to sign it. The content of the management representation letter is prepared by the auditor and signed by the higher management of the audit client.

Mainly, the following content is included in the letter.

• Confirmation of the information provided during the overall audit process.

Explanation

Auditors need to obtain multiple documents/supports from the audit client to issue an audit report. So, by issuing a representation letter, they seek confirmation from management/audit clients that the information provided to the auditors is genuine and does not include inaccurate/false information. Further, they have provided all the material financial/operational information to the auditor that is relevant to the audit.

So, representation letter’s content is designed to improve the auditor’s confidence to issue clean audit report.

It should be noted that through this letter, auditors get a confirmation for the facts related to technical/grey areas of the business activities/audit-related activities. For instance, they found some technical aspects in applying the reporting standard where management has claimed deferral due to their business sector. In this case, the auditor can include the following paragraph to get confirmation from management in their letter.

The application of the accounting standard XYZ is deferred for the next reporting period. The deferral is made under paragraph XYZ of the regulations. Kindly confirm this is in order.

The last words of the paragraph are home of sigh for the auditors. That’s because these words get confirmation from the higher management of the audit client.

• Confirmation of the responsibilities of the management.

  Explanation

Auditors seek written confirmation from management about their responsibilities. For instance, this letter states that the financial statement’s preparation is the management’s responsibility. In other words, auditors are not responsible for preparing financial statement. However, they issue reasonable assurance reports.

So, a management letter is a type of insurance for the auditor as it transfers some of the responsibilities from the shoulder of the auditor to the management/audit clients.

There are so many questions that might come to your mind about a representation letter. For instance, at what time representation letter is prepared, what’s the importance of this letter, who is responsible for preparing this letter, which accounting standard requires the preparation of this letter, and what does it look like? Let’s explore related details for the same.

Also read, Steps to perform External audit .

At what time representation letter is prepared?

The management letter is prepared at the end when the audit is finalized. All the issues, from audit planning to report, are written in one place in the letter to ensure the auditor and management of the company are in one place.

What’s the importance of a management representation letter?

The management letter helps the auditor gain confidence on the audit’s overall issues. For instance, there might be some grey areas in auditing. So, they write all of these areas in one place in the management letter and get confirmation from the higher management of the audit client.

Who is responsible for issuing a written representation letter?

The auditors prepare this letter as this letter is for their relief, and they are in a better position to document all the technical/grey areas. However, once finalized, the letter is dispatched to the audit client’s higher management for review and signature.

It’s important to note that auditors do not sign an audit report if management has not given back a management/representation letter after the higher management’s signatures, (like the CEO and CFO of the company). Sometimes, this letter is also called a letter for representation. For higher management, we also use a term called those charged with governance.

Which auditing standard requires a representation letter?

ISA 580 provides guidance related to representation letter . In the scope section, this ISA states that the auditor is responsible for obtaining this letter from the company’s management. However, the signature can also be obtained from those charged with governance.

Auditors prepare a representation letter, and there are two main components. The first component is about the responsibility of the management and auditor. And the second component is about getting confirmation for the audit’s technical/operational/strategic aspects. As per ISA 580, the auditor is responsible for preparing written representation letter, and it’s signed by management/those charged with governance of the audit client. Further, it’s usually signed at the audit completion stage. However, if management does not sign the letter, the auditor needs to disclaim the audit.

Frequently asked questions

Can auditors use written representation as audit evidence?

The representation letter is not direct audit evidence. And it’s not sufficient and appropriate. However, it increases auditors’ confidence about specific audit matters as higher management has confirmed facts are in order.

Can auditors sign audit reports without getting a representation letter from management?

No, they are required to disclaim the audit if management does not sign a representation letter.

What if management does not sign a written representation letter?

As per ISA 580, the auditor is responsible for getting written representation from management. However, if management is not ready to sign the letter, auditors need to disclaim the audit.

Related posts:

• Steps to perform an external audit
• Top five external audit companies in the world
• What is bank confirmation letter?
• What Is Operational Audit
• Why is business understanding important for the auditor?
• Scope of an audit

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Sample Attorney Representation Letter | Miller & Zois

This is a very basic letter of representation to the insurance company or company that you are representing the personal injury victim in a motor vehicle accident case. You could send this same representation letter to opposing counsel.

This website has everything you need to put together a personal injury case. You can find more sample letters and sample forms to put your claim together.  You might also find of interest our breakdown of the insurance company you are dealing with in your case. It is all free, we just want to help!

You may also need to send out a spoliation letter if you believe that the defendant or the insurance company has evidence that must be preserved. You can also combine your attorney representation letter with your spoliation notice.

Sample attorney representation letter

February 12, 2024

Ms. Leslie Jones GEICO DIRECT One GEICO Boulevard Fredericksburg, VA 22412-0002

Re: Our Client: Your Insured: Date of Accident:

Dear Ms. Jones:

Please be advised that this office represents the above-named individual for the broken leg, fractured wrist, occipital, and other injuries sustained as a result of an automobile accident with your insured. Your client ran a red light with multiple witnesses, including a Baltimore City police officer who arrested your client on suspicion of drunk driving. I do not suspect you will dispute responsibility.

I will forward to you medical bills and reports for my client as soon as they become available. We will keep you posted on significant treatment developments.

Also, please inform me of the policy limit on your insured’s vehicle and let me know of any other applicable insurance coverages that might pertain to this claim. I have a concern that this is a policy limits case.

If you have any questions or concerns, please contact me or Justin Zuber, another Miller & Zois attorney who will be working on this claim.

Very truly yours,

Ronald V. Miller, Jr.

Related Articles and Samples

• Get 4 Model Demand Letters
• How Much Is My Case Worth?
• Tips on Handling Your Own Claim
• Have a Question for Us?
• Uninsured Motorist Letter of Representation in a Personal Injury Case
• Tell me how much money my claim is really worth: a road map to the true value of a claim
• Handling Your Own Personal Injury Case (a few tips if you proceed without a lawyer)
• Looking to Refer Your Personal Injury Case? (Miller & Zois splits fees with co-counsel consistent with Maryland Rule 1.5(e))

What is an attorney representation letter in a personal injury case?

An attorney letter of representation is correspondence, usually a letter, sent by the victim’s attorney to the defendant or an insurance company advising that an attorney represents the victim. The purpose of a representation letter is to make the opposing party aware that counsel represents your client.

What should be in a lawyer’s representation letter to an insurance company?

When you write a representation letter to the insurance company in a personal injury, you notice should make clear

• \the attorney and paralegal taking the lead on the case
• the scope of the injuries to give the adjuster the ability to set early reserves on the case, and
• you want to immediately know the insurance policy limits.

When should you notify the insurance company that the victim is represented by an attorney?

Our law firm gets out a notice of representation letter the moment we begin to represent the client. You do not want the insurance company communicating with your client because there is always a fear the client will divulge information that could compromise the case.

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Letters of representation

Helpsheets and support

Published: 01 Oct 2012 Updated: 24 Jan 2022 Update History

Introduction

Requirement, audit engagements, non-audit engagements, example letter of representation, if in doubt seek advice, appendix 1: example letter of representation.

Technical helpsheet to help ICAEW members to understand the need for letters of representation in the context of auditing and to consider other situations where a letter of representation may be useful. To assist members in the preparation of letters of representation, this helpsheet also includes an example letter.

This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members to understand the need for letters of representation in the context of auditing and to consider other situations where a letter of representation may be useful. To assist members in the preparation of letters of representation, this helpsheet also includes an example letter.

Members may also wish to refer to the following related guidance:

• TECH 04/02 AAF Management representation letters: Explanatory note
• International Standards on Auditing (UK)

A word version of the sample letter of representation wording  is available to download and complete.

Written confirmation(s) of representations from management is a requirement of the International Standards on Auditing (UK) (ISAs (UK)) and is therefore required for each and every audit. They are also useful to confirm, in writing with clients, information, assumptions and accounting treatments in non-audit engagements.

A number of ISAs (UK) require written representations to be obtained from management. These must be obtained as near as practicable to, but not after, the date of the auditor’s report (ISA (UK) 580 paragraph 14) in the form of a letter addressed to the auditor (paragraph 15).

Representations are requested from management with appropriate responsibilities for the financial statements and knowledge of the matters concerned. In the UK, those charged with governance are responsible for the preparation of the financial statements.

Letters of representation can be, and often are, signed by more than one member of the audited entity’s staff – the auditor needs to make an assessment as to who is in the best position to provide the representations required. ISA (UK) 580 requires written representations from management 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 (paragraph 10);
• It has provided the auditor with all relevant information and access as agreed in the terms of the audit engagement (paragraph 11(a)); and
• All transactions have been recorded and are reflected in the financial statements (paragraph 11(b)).

As well as the written representations required in ISA (UK) 580, the following ISAs (UK) require subject-matter specific written representations – reference should be made to the particular ISA (UK) for the full text of the requirements:

• ISA (UK) 240 (Revised May 2021) The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements (paragraph 39);
• ISA (UK) 250 (Revised November 2019) Section A – Consideration of Laws and Regulations in an Audit of Financial Statements (paragraph 17);
• ISA (UK) 450 (Revised June 2016) Evaluation of Misstatements Identified during the Audit (paragraph 14);
• ISA (UK) 501 Audit Evidence – Specific Considerations for Selected Items (paragraph 12);
• ISA (UK) 540 (Revised December 2018) Auditing Accounting Estimates and Related Disclosures (paragraph 37);
• ISA (UK) 550 Related Parties (paragraph 26);
• ISA (UK) 560 Subsequent Events (paragraph 9);
• ISA (UK) 570 (Revised September 2019) Going Concern (paragraph 12-2(f));
• ISA (UK) 710 Comparative Information – Corresponding Figures and Comparative Financial Statements (paragraph 9); and
• ISA (UK) 720 (Revised November 2019) The Auditor’s Responsibilities Relating to Other Information (paragraph 13(c)).

In addition, paragraph A25 of ISA (UK) 500 Audit Evidence highlights that the auditor may consider it necessary to obtain written representations from management and, where appropriate, those charged with governance to confirm responses to oral enquiries.

Auditors should be reminded that written representations cannot be used as sole audit evidence in relation to any specific area of the financial statements. Written representations should be used as corroborative evidence in order to support existing audit evidence, rather than as a substitute for the auditor performing specific audit procedures to obtain sufficient appropriate audit evidence.

Accounts production

Members preparing accounts, without carrying out an audit, may also find it useful to obtain written representations from their clients. Obtaining such representations is useful to emphasise the importance placed on information provided by management in order for the member to undertake the work. In particular, where the work involves the preparation of statutory accounts and there are disclosure requirements that rely on information received from management (for example, post-balance sheet events or related party transactions), this would be appropriate.

Where a firm has prepared the accounts for a client and based those accounts on assumptions and decisions made by management then the firm may wish to confirm the treatment of particular transactions or balances in writing in a letter of representation. For example, movements in a directors’ loan account.

Tax compliance

Obtaining written representations could also be appropriate in other circumstances, for example when undertaking tax computations, where information supplied is crucial to the computation and has not been independently corroborated.

The goodwill or value of a block of clients is often based on the fees or profits they can generate. Bases usually start from the fees or profits that can be generated from the current services supplied to the clients and then apply a multiple to them to obtain the value.

Basis of the calculation

The following, non-exhaustive list, may be used as a starting point of the calculation:

• Gross recurring fees
• Future fee income
• Profitability

If multiples are used within the calculation, they will depend on a wide range of factors – there is no one ‘correct’ multiple to be used, it will be for the buyer and seller to determine. Additional considerations may however include:

• Work in progress

Due diligence

For a deal to be successful the 'fit' of the fees with the buyer will need to be established. At the outset of negotiations often all that is available is a total fee figure and details of numbers of clients in certain fee brackets with an indication of the services provided and the location of the clients. Far more detail needs to be obtained during the negotiation phase. How this information is obtained varies but at some stage the buyer would expect to see client files, accounts, fee notes etc. and where staff are involved, meet with and talk to them.

The seller will need to ensure that the fundamental principle of confidentiality as discussed in section 114 of the ICAEW Code of Ethics  is adhered to and the authority of the client would usually be required prior to disclosing client confidential information. It is normal before detailed information is disclosed that a confidentiality and non-poaching agreement is formally documented between buyer and seller. Such an agreement should also include a 'hold-harmless' clause whereby the buyer agrees not to use any information obtained against the interests of the seller.

The following are some of the matters to be considered when undertaking due diligence information gathering:

• Confirmation of information and detail
• Fee levels and charging structure
• Quality of work and files
• Profitability and overheads

A period of working together, alongside each other or in cooperation or collaboration could be agreed. The arrangements can vary considerably and will be particular to each individual’s circumstances. The arrangements should be able to be terminated without either party suffering substantial loss.

The example in Appendix 1 to this helpsheet deals specifically with those matters that are required to be confirmed by the ISAs (UK), together with other common representations obtained. It is based on the example in Appendix 2 of ISA (UK) 580.

In addition, the letter of representation should include confirmations from management on matters material to the financial statements in order to support other audit evidence obtained. In particular, where amounts are included in the accounts based on management estimates or valuations (such as property or stock values), it would be appropriate to include written confirmations.

It is not current best practice to include a long list of representations about assets and liabilities included in the accounts. Such paragraphs can detract from the impact of the more important matters, and in the case of an audit should be confirmed by adequate audit evidence.

Within the specimen letter of representation, guidance and instruction are shown in italics . None of this italicised text is for inclusion in the letter of representation. Members need to ensure it has been sufficiently tailored and all italicised text has been removed, before it is sent to client’s management for them to print on their own letterhead and sign as appropriate and then return to the firm. In some paragraphs, optional or alternative wording has been provided, shown in [square brackets] and each suggestion requires individual consideration and possible amendment.

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access  can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat .

• Download the sample letter of representation wording

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ICAEW cannot accept responsibility for any person acting or refraining to act as a result of any material contained in this helpsheet. This helpsheet is designed to alert members to an important issue of general application. It is not intended to be a definitive statement covering all aspects but is a brief comment on a specific point.

ICAEW members have permission to use and reproduce this helpsheet on the following conditions:

• This permission is strictly limited to ICAEW members only who are using the helpsheet for guidance only.
• The helpsheet is to be reproduced for personal, non-commercial use only and is not for re-distribution.

For further details members are invited to telephone the Technical Advisory Service T +44 (0)1908 248250. The Technical Advisory Service comprises the technical enquiries, ethics advice, anti-money laundering and fraud helplines. For further details visit icaew.com/tas .

• Update History 01 Oct 2012 (12: 00 AM BST) First published 08 Jan 2021 (10: 40 AM GMT) Updated to reflect requirements of the revised ISAs. 05 Jan 2021 (12: 00 AM GMT) Minor edits relating to Brexit / updated regulations. Links updated. 24 Jan 2022 (01: 55 PM GMT) Changed date of latest version of ISA (May 2021). Date of specimen letter updated to match helpsheet

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Table of Contents

Some say that your Summary Letter (LOE) is one of the more important documents, if not the most important document, in your immigration package. This is the document that clearly answers the following questions for the Canadian immigration officer reviewing your application:

What is a Letter of Explanation, also called Summary Letter for Canadian Immigration?

Some say that your Summary Letter is one of the more important documents, if not the most important document, in your immigration package. This is the document that clearly answers the following questions for the Canadian immigration officer reviewing your application:

• Does this person qualify for this application?
• How to they qualify? – what is the supporting documentation

This letter is known by a few names, most call it a Summary Letter, but it’s also called, Submission letter, Letter of Explanation (LOE), and cover letter.

DOWNLOAD YOUR SUMMARY LETTER TEMPLATE (SIMPLE CASES) – PDF OR WORD

Download your summary letter template (complex cases) – pdf or word.

Tip : When to use a template vs. when to write a Summary Letter methodically : Use a template with a straightforward application but any complexity needs care, attention and experience.

Who needs a Summery Letter for Canadian immigration, and who can skip it?

First, technically everyone needs a summary letter but the reality is very few people that are filing their own applications will take the time to create one. Even people in the legal industry will not use one at times because the application request is minor or just they are lazy.

The good immigration news is so many poorly completed applications must be sitting on the desk of that immigration officer. When they get yours, it will be a sigh of relief, seeing your professionally written, well argued, perfectly completed application. It can make even weak cases look a lot stronger.

People submitting simple applications can all skip the letter, unless you have some complexity in your case (see examples below).

Examples of when you should and when you shouldn’t use a Summary Letter for Canadian immigration:

PR Card renewal application: You can skip the letter BUT anyone whose status in is jeopardy – anyone who has been outside of Canada for 1,000 days or more out of the last 5 years – should really provide a summary letter.

All Sponsorship applications, PNP applications or even normal Express Entry immigration applications (FSW, CEC, FST) should include summary letters (LOEs).

A simple application with a unique circumstance should include a summary letter . Any application with multi-jurisdictional problems should include a summary letter. Example: you’re filing an application but you need to explain to Canadian immigration that you are missing a document. (Example: ‘I can’t get this document from the check list because my home country does not issue it anymore’.)

Summary Letter for Immigroup’s Spousal Sponsorship Course

We’re at Step 25 and we have more than 10 more chapters to go to lay out, step by step, how to put together a successful sponsorship application. You are likely getting a pretty good idea of the sheer volume of information  – forms and supporting documents of all sorts from around the world – that a sponsorship application potentially can contain.

Now imagine you’re an IRCC official who has to review countless numbers of these applications and make a decision on each one of them. This is not an easy job to do.

Now imagine you receive a sponsorship application which has a Summary Letter right at the top of the package, and that Summary Letter tells the official:

• That this applicant indeed  qualifies for permanent residency , and
• How this applicant qualifies  – briefly and concisely and point by point – for permanent residency
• Precisely who the applicant is, how many people are being sponsored, and where in the application all this information satisfying IRCC’s criteria can be found.

You have just provided a clear framework for decision-making on the part of the IRCC official.

Can a good Summary Letter get a person with serious criminality accepted as a permanent resident? No, almost certainly not.

But can a well-written Summary Letter  tip the balance in your favour  in a complex application with some issues that might hinder your success? Absolutely.

One of the first things you have to realize is that  there is no standard one-size-fits-all Summary Letter . Each letter will depend on the specifics of the applicant’s situation and address all the concerns that an IRCC official may have about the merits of their case.

It will provide a clear narrative  that links together all the forms and documents involved.

In our in-depth article on summary letters , you should click on the links for sample Summary Letters and take a few minutes to read through one.

The detail that can be covered is impressive because of the orderly way it is presented. It makes it easy for an officer to read through it and check off each item of concern that they often have with any specific type of application.

If you’re a lawyer, or very good at effective and detailed written communication, then you can have a shot at writing the letter yourself.

You really should also consider getting professional help in putting one together. It really can make the difference between success and failure.

When the following is true:

• Your case is complicated – most sponsorship applications are, and
• You need your application to be processed relatively quickly – in order not to keep your spouse/partner waiting abroad or living on tenterhooks in Canada, and
• You don’t have the time to put a good letter together – writing the summary letter will inevitably involve reviewing your overall application so it will be time-consuming,

Then  you should hire a professional to write your Summary  Letter, or as they are sometimes called, Letter of Explanation (LOE).

Overall, between $500 and $1,500 – depending on the complexity of your case – is a reasonable range to expect for a professional to write your summary letter. (Of course, if you’ve hired someone to submit your application for you, the summary letter should be part of this service.

• If Immigroup handles your application from end to end,  your Summary Letter is included in the overall service price . Keep that in mind.
• For a sponsorship application your Summary Letter will be written by an Immigration Consultant or Paralegal who has a lot of experience handling sponsorship applications and has done dozens of summary letters and understands the matter thoroughly.
• For some complex cases expert consultants or lawyers may be needed – the big guns in other words.

So, take a few minutes and review our article here to see just how important a Summary Letter is.

You might want to just get Immigroup to help you out with your Summary Letter, or get more involved, but that’s your call.

However, let’s say you want to give it a shot and put one together yourself. Here’s a good way to proceed.

• A company you worked for may have gone bankrupt so you can’t get a reference letter from them.
• A former partner or spouse has not communicated with you in years and they cannot sign a document or they have not signed a divorce document for example even though the court awarded you a divorce.
• A parent might not be located for similar reasons – they no longer have any contact with you.
• For each of the gaps you find as you complete your application,  you will need to provide a clear and concise explanation to immigration officials . You might be able to provide  alternative evidence  or at least give a hopefully convincing reason why you cannot provide the required document.
• These explanations are the main body of your Summary Letter . You should also have an introduction and address the letter cordially to IRCC (something like  Dear Officer  is fine) and then explain you will be addressing any concerns they may have.
• Most Summary Letters are a couple of pages long at most , but if your case is complex and there are a number of gaps in required information you may need an extra page or two. Keep it as simple as possible, however.  The objective is to make the official’s decision easier to take .

So, keep these points in mind as you read over some of  our sample Letters of Explanation or Summary Letters  and see how they deal with gaps in required information.

Then start putting together your own Summary Letter.

When do you hire Immigroup and when to write your own Summary Letter?

Do it yourself:

• It is not a complicated application, I just what things to look clean and professional
• It is a little complicated, but the case is not that confusing. I am an excellent writer; I have written business letters and I have submitted applications to the government before.

When do you hire Immigroup?

• My case is complicated.
• I need the Canadian immigration officer to complete my application as quickly as possible.
• I don’t have the time to do this myself.

I am thinking of shopping around, what is a reasonable price to pay for a Summary Letter/Letter of Explanation?

The price of a review of a Summary Letter in the immigration industry can be all over the place. We have seen prices as low as $150 all the way to $2000 . The reality is price is just one important indicator, the second factor and the more important one, is the experience of your consultant .

• First off, someone asking for $150 for a letter will give you low quality work, so you are better off not wasting your time and money. Paying $150 for a Summary Letter means you’re not getting a good deal , rather only false hope and almost certain disappointment.
• The other extreme of $2000, could be a good thing or a bad thing : In the legal industry when someone does not want to do something because, for example, they are too busy or, even worse, they are apprehensive because they have lack of experience; instead of being honest they quote an extremely high price . This is a legal practitioner’s way of telling you to get lost. They do this because one in ten potential clients will actually say yes. I am assuming these clients must think, ‘wow, they must be really good if they ask for such a high price!’ Again, in most cases this is a trap you don’t what to fall for. There is the occasion al exception of the amazing legal perfectionist with 20 years of experience, the rock stars of our industry, which do deserve this amount. But more likely you will end up paying a top fee for mediocre results.
• So, what is a reasonable price for a letter? A good price would be between $500 (little complexity) to $1500 (a lot of complexity) which is a reasonable standard to pay for a Summary Letter.

TIP : Did you know that Summary Letters are included with a full Immigroup service for any application ?

Who at Immigroup will write my Summary Letter (LOE) for Canadian immigration?

This depends on the complexity and type of application. For example, if you are doing a Spousal Sponsorship, it will likely end up going to an immigration consultant or a paralegal who does a lot of these types of applications. These are licensed and regulated individuals that who regularly include summary letters in applications they submit to the Canadian government and have lots of experience.

If your case is complex, we will send it to a specialist – no choice here we need to call for the big guns. Some are lawyers, some are consultants, but all are very respected in their field.

Using Immigroup to write a Summary Letter

• Scan and email your applications to us – including all supporting documents (example: Sponsorship) – [email protected]
• Once you have sent us your package, we will contact you by email in 1 or 2 business days after we have evaluated the cost to write a summary letter regarding your case. We will send you a payment request link (at this time you can refuse to pay and we will delete your personal information).
• Once payment is sent, it will take our team 5 to 10 business days to review your documents and write your Summary Letter.

Average cost for a summary letter $225 easy, $550 to $750 normal case, and $1500+ challenging case.

Tip : Because your immigration specialist needs to review your documents to write the Summary Letter, you can request for them to make corrections to your application. Additional charges will apply.

Summary Letter Terms of Service

• Summary Letters do not come with use of representation, this service is extra.
• All Summary Letter are completed by regulated immigration consultants or paralegals.
• If you need one of our lawyers to do this for you, additional charges will apply.

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Taylor Swift Sings ‘My Husband Is Cheating’ on ‘Fortnight’ with Post Malone

The Tortured Poets Department is now open. Taylor Swift begins her long-awaited new album with a Post Malone collaboration, “Fortnight,” which not only kicks off the track list but also serves as the lead single.

In the lyrics, Swift sings about a romance that was short-lived but affected her deeply (and continues to, as her former lover moves on). She sings, “And I love you it’s ruining my life / I touched you for only a fortnight” in one line, and “Your wife waters flowers. I wanna kill her,” in another.

While fans are anticipating Swift will reflect on her past relationships with Joe Alwyn and Matty Healy on this project, it’s possible she and Malone are taking artistic license here as she sings about a wayward spouse. “My husband is cheating. I wanna kill him,” one lyric goes. As Swift said while writing folklore , “The lines between fantasy and reality blur and the boundaries between truth and fiction become almost indescribable.” Is that the case here?

She also seems to reference the fact that she stopped drinking ahead of the Eras Tour with the lyric, “I was a functioning alcoholic / ’Til nobody noticed my new aesthetic.” Swift told TIME last year, “Doing that show with a hangover, I don’t want to know that world.”

Swift later revealed what inspired “Fortnight” to Amazon Music . “‘Fortnight’ is a song that exhibits a lot of the common themes that run throughout this album,” she began. “One of which being fatalism—longing, pining away, lost dream. I think that it’s a very fatalistic album in that there are lots of very dramatic lines about life or death. ‘I love you, it’s ruining my life.’ These are very hyperbolic, dramatic things to say. It’s that kind of album.”

Listen to “Fortnight” and read the full lyrics below, courtesy of Genius .

I was s’posed to be sent away But they forgot to come and get me I was a functioning alcoholic ’Til nobody noticed my new aesthetic All of this to say, I hope you’re okay But you’re the reason And no one here’s to blame But what about your quiet treason? And for a fortnight there we were forever running ’Til you sometimes ask about the weather Now you’re in my backyard turned into good neighbors Your wife waters flowers, I want to kill her All my mornings are Monday stuck in an endless February I took the miracle move on drug, the effects were temporary And I love you, it’s ruining my life I love you, it’s ruining my life I touched you for only a fortnight I touched you, but I touched you And for a fortnight there we were forever runnin' ’Til you sometimes ask about the weather Now you’re in my backyard, turned into good neighbors Your wife waters flowers, I want to kill her And for a fortnight there we were together running ’Til you sometimes come and tug my sweater Now you're at the mailbox turned into good neighbors My husband is cheating, I want to kill him I love you, it’s ruining my life I love you, it’s ruining my life I touched you for only a fortnight I touched you, I touched you I love you, it’s ruining my life I love you, it’s ruining my life I touched you for only a fortnight I touched you, I touched you I call you up but you won’t pick up Another fortnight lost in America Move to Florida, buy the car you want (Car you want) But it won't start up ’til you touch, touch, touch me I call you up but you won’t pick up Another fortnight lost in America Move to Florida, buy the car you want But it won’t start up ’til I touch, touch, touch you

This post has been updated with Swift’s comments on what inspired “Fortnight.”

A Guide to Taylor Swift’s The Tortured Poets Department

The Unexpected Reference in Taylor's ‘Florida!!!’

Who’s Taylor Swift’s ‘Down Bad’ About?

Are Taylor’s ‘The Albatross’ Lyrics About Travis?

All the Easter Eggs in the ‘Fortnight’ Music Video

What Taylor’s ‘Cassandra’ Lyrics Mean

‘I Can Fix Him (No Really I Can),’ Explained

Taylor Explores Breakup in ‘How Did It End?’

Taylor Asks: ‘Who’s Afraid of Little Old Me?’

What Taylor Swift’s ‘The Black Dog’ Is About

Taylor Swift’s ‘imgonnagetyouback,’ Explained

Read Taylor Swift’s ‘Guilty as Sin?’ Lyrics

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The Blair Witch Project’s original cast ask for retroactive payments as reboot announced

Actors Rei Hance, Joshua Leonard and Michael Williams – who improvised most of horror film’s dialogue – claim they didn’t have proper union representation in 1999 and seek residuals

The stars of The Blair Witch Project have called for more compensation for their work in the original film, as well as “meaningful consultation” on any reboots and sequels, after it was announced that the horror franchise is being revived yet again.

On Saturday, actors Rei Hance (formerly known as Heather Donahue), Joshua Leonard and Michael Williams issued an open letter to Lionsgate, the studio that now owns the Blair Witch franchise.

The letter, published on Leonard’s Facebook page , called for “retroactive and future residual payments” for the three actors for their work in the 1999 film, “equivalent to the sum that would’ve been allotted through [actors’ union] Sag-Aftra”, and say they did not have “proper union or legal representation when the film was made”.

The actors also asked for creative input in the Blair Witch franchise, which to date has spawned two more films, multiple novels, comic books, a video game series and an upcoming revival that Lionsgate announced this month, in collaboration with popular horror studio Blumhouse.

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“Our film has now been rebooted twice, both times were a disappointment,” the open letter reads. “As the insiders who created the Blair Witch … we’re your single greatest, yet thus-far unutilized secret-weapon!”

The third and final request in the letter was the development of an annual US$60,000 (A$93,000) grant for “an unknown/aspiring genre filmmaker to assist in making their first feature film”.

The sum of the grant reflects the initial budget of the 1999 film, which went on to make more than $248m at the worldwide box office.

Hance, Leonard, and Williams were unknowns during the making of The Blair Witch Project, which was an independent film directed by Daniel Myrick and Eduardo Sánchez. The actors improvised much of the dialogue and participated in film marketing stunts, including appearing on missing persons posters to blur the lines between fiction and reality.

The film’s IMDb page listed the actors as “missing, presumed dead” around the film’s release.

The Blair Witch Project reignited the found-footage genre when studio Artisan Entertainment bought distribution rights for $1m. Artisan Entertainment was acquired by Lionsgate in 2003.

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In an Instagram post following Lionsgate’s announcement of a Blair Witch revival earlier this month, Leonard said he and his fellow two stars were paid $300,000 each for a full buy-out of their ownership over the original film.

“I’m so proud of our little punk-rock movie,” Leonard wrote at the time. “But at this point, it’s 25 years of disrespect from the folks who’ve pocketed the lion’s share … of the profits from our work, and that feels both icky and classless.”

The actors’ letter was supported by an accompanying statement from directors Myrick and Sánchez , as well as the film’s producer.

“As the literal faces of what has become a franchise, [the actors’] likenesses, voices and real names are inseparably tied to The Blair Witch Project,” they wrote. “We celebrate our film’s legacy, and equally, we believe the actors deserve to be celebrated for their enduring association with the franchise.”

Jason Blum, the chief executive of Blumhouse, has previously spoken of Blair Witch’s influence on his studio’s films, saying: “I don’t think there would have been a Paranormal Activity had there not first been a Blair Witch.”

Lionsgate has declined to comment on the open letter.

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Column: Melissa Barrera is not afraid

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On paper, the gig is straightforward, albeit unconscionable: kidnap the daughter of a wealthy businessman and hold her until daddy coughs up the ransom. A crack team assembles, satisfying all the necessary roles for a heist. But after the girl is taken, it slowly becomes clear that the job description wasn’t entirely transparent about the true threat. Daddy’s little girl, it turns out, is a vampire.

“Abigail , ” the latest campy, gory romp from Radio Silence Productions (“ Ready or Not” ), sees Melissa Barrera take center stage as Joey, a former military medic with a knack for reading people and someone who has serious qualms with the mission; she didn’t know the target was a kid. Seeing Barrera in such a prominent role and solidifying her status as a scream queen was emotional. It was mere months ago that she was unceremoniously dropped as a lead in the “Scream” franchise and accused of being antisemitic for her public support of Palestinians.

I had the opportunity to talk with Barrera over the phone about “Abigail,” about being a Latina in the film industry and about her experience with Spyglass Media, the company behind the “Scream” franchise that fired the Mexican-born actress for Instagram stories voicing support for Gaza, where more than 30,000 have been killed following the events of Oct. 7, which saw more than 1,000 Israelis kidnapped or killed. I’d written about Barrera’s firing shortly after it happened , and was eager to get her perspective. Lucky for me, Barrera wears her heart on her sleeve.

“I did have opportunities taken away from me,” she said. “But I always trusted God, trusted that everything was going to work out for me. I have angels that are looking out for me, and I knew I was going to be OK.”

— Melissa Barrera

In “Abigail,” Joey is the strong, silent type with a maternal soft spot for her young captive. She’s capable, level-headed, and constantly coming up with solutions. She gets things done. I was surprised to hear, then, that Barrera sees Joey as “probably one of the characters that is least like me that I’ve played.”

“I have to find the thing that we have in common, that’s my departure,” she said of immersing herself in her roles. “But Joey is very reserved, a fly on the wall. She’s an observer. She doesn’t want to be the center of attention. She’s there to do a job and say, ‘bye.’ She has no interest in becoming friends with anyone, or in being the leader. She’s just not that person.

“But I am.”

Put that way, it’s easy to see where Barrera is coming from. She’s not shy about being the center of attention, or about being the leader. For many, including myself, Barrera was best known as the person who, along with her castmate, Jenna Ortega, breathed new life into the “Scream” franchise in the sixth installation of the series. But for others, she came to national prominence following her dismissal from that very role last November after making pro-Palestinian comments on social media.

“Gaza is currently being treated like a concentration camp,” read one of her Instagram stories in the wake of the events of Oct. 7. “Cornering everyone together, with no where to go, no electricity no water … People have learnt [sic] nothing from our histories. And just like our histories, people are still silently watching it all happen. THIS IS GENOCIDE & ETHNIC CLEANSING.”

Spyglass Media was unambiguous about why they’d dropped Barrera.

“Spyglass’ stance is unequivocally clear: We have zero tolerance for antisemitism or the incitement of hate in any form, including false references to genocide, ethnic cleansing, Holocaust distortion or anything that flagrantly crosses the line into hate speech,” a spokesperson told Variety last fall.

Spyglass Media declined to comment on this story. In March, following the firing of Barrera and departure of co-star Ortega from the project, Neve Campbell announced that she would be returning to the franchise in “Scream 7.”

“It wasn’t easy to be labeled as something so horrible when I knew that wasn’t the case,” Barrera said of being accused of antisemitism. “But I was always at peace, because I knew I had done nothing wrong. I was aligned with human rights organizations globally, and so many experts and scholars and historians and, most importantly, Indigenous peoples around the world. I find that the Indigenous communities around the world are always on the right side of history, point blank, period.”

As bombs have continued to fall on Gaza in the months following the Oct. 7 attack and the death toll continues to climb, public opinion has swayed , and many in the U.S. have become more sympathetic to the Palestinian plight. In the immediate aftermath, however, public statements from celebs were rare, especially ones as impassioned as Barrera’s.

Barrera wasn’t without supporters. She gained more than 400,000 followers on Instagram following her firing, and her creative partners have continued to work with her, partners like Matt Bettinelli-Olpin and Tyler Gillett of Radio Silence Productions.

“I got a lot of support from people in the industry, my family, friends, so many people reached out to me,” she said. “A part of me was terrified, but I don’t regret a thing. I don’t regret anything. And you know, we’re six months in, and people are still dying. It’s so obvious what’s going on, and people are coming around and speaking out and I’m just happy about that. It gives me hope for the world.”

It was nonetheless a big risk to speak out. Barrera’s firing took place in the context of a Hollywood where roles for Latinas are already vanishingly rare. Latino representation in Hollywood has reportedly not shown any growth in the past 16 years, despite the Latino population having grown in the U.S., where we account for around 19% of the country’s makeup. When Latinos are cast, it’s often as violent criminals.

“I gravitate to roles that aren’t written for us,” Barrera said, “because that’s how we create more space for us in the industry, when we fight for more, when we go for roles that aren’t obviously Latino or Latina, and that don’t need an explanation.”

“Abigail’s” Joey is one such role, and it was a breath of fresh air to see a Latina leading a film with such an impressive ensemble cast. In a landscape where Latinas are often pigeonholed into the “spicy” or “fiery” love interest, seeing Barrera’s depiction of a cold, calculated professional felt like a reprieve.

“We have the shows and the movies about speaking Spanglish and you get the abuela and you see the traditional food she made and you get the Vicks VapoRub jokes and all that,” Barrera said of the typical roles offered to Latinas, “and that kind of representation can be important for sure. But it feels like Latinos and Latinas always have to do something stereotypical to explain who we are, to make the majority comfortable with our presence, and I’ve never liked that. I enjoy just being a human being, allowed to exist without having to explain myself.

“My characters are going to be Latinas because I am,” she added.

I asked Barrera if, while being put under intense scrutiny, she thought about the precarious position Latinas occupy in Hollywood, an industry where their presence is conditional, and where they are often seen as disposable.

“I’ve never thought of myself as expendable,” she said. “I know what I can bring to a project. I know I’ve worked really hard, and that I’ve worked with people I treasure, and who treasure me. So I’m not scared. I don’t think of human beings as disposable. I think every human being has value. I think that’s why I’m so passionate about Palestine, their human rights and their self-determination.”

The entertainment industry is fraught with dangers for marginalized people. But for Barrera, being afraid isn’t an option, and she dismisses the idea of having to hedge on her beliefs or play along with the system. She knew when she signed up for it that speaking out and using her platform is simply part of the job description.

“That’s what art is meant to be,” she said. “We’re supposed to, yes, give people joy through art, but also talk about the world. We’re supposed to make art that is a reflection of the world, and what we want that world to be, what we know the world can be.”

Despite their differences, it seems Barrera has this in common with Joey: She has a job to do, and she intends to do it, no matter what perils she might encounter on the way.

JP Brammer is a columnist, author, illustrator and content creator based in Brooklyn. He is the author of ”Hola Papi: How to Come Out in a Walmart Parking Lot and Other Life Lessons,” based on his successful advice column. He has written for outlets that include the Guardian, NBC News and the Washington Post. He writes regularly for De Los.

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