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Example of a management representation letter – financial ...
Example of a management representation letter – financial ...
Example of a management representation letter – financial ...
Example of a management representation letter – financial ...
Example of a management representation letter – financial ...
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Example of a management representation letter – financial ...

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  • 1. Example of a management representation letter – financial statements of a company DOCUMENT TO DRAW UP ON THE LETTERHEAD OF THE COMPANY Audit firm For the attention of Mrs/Mr ... Registered auditor Address ... ………., ……………20XX Dear Sirs, Subject: management representation letter This representation letter is provided in connection with your audit of the financial statements of our company for the year ended on 31 December 20XX mainly for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the company’s net assets value, its financial position and the results of its operations for the year then ended, and this in accordance with the laws and regulations applicable in Belgium. We remind you that the applicable financial reporting framework is the Belgian Company Code and the Royal Decree of 30 January 2001 implementing this Company Code. The objective of the present letter is to confirm you our understanding of a comprehensive set of elements relevant to these financial statements and to the functioning of our company. The present document is confidential and forms part of your working papers. These representations do in no way imply a discharge of your responsibility to express an opinion on the financial statements based on your audit that is deemed to have been conducted in accordance with the legal provisions and auditing standards applicable in Belgium, as issued by the Institute of Registered Auditors (Institut des Réviseurs d’Entreprises/Instituut van de Bedrijfsrevisoren). Those standards require that you plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements. 1. By virtue of the law, we are responsible for the preparation and fair presentation of the financial statements in accordance with the financial reporting framework applicable in Belgium. Without prejudice to formal aspects of minor importance, the accounting records were kept in accordance with the laws and regulations applicable in Belgium and the financial statements have been duly drawn up by the board of directors.
  • 2. 2. We acknowledge our responsibility for the design, the implementation and the maintenance of internal control in order to prepare reliable financial statements, including the fact that this internal control aims at preventing and detecting fraud and error. TEXT TO CHOOSE: 3. a. To the best of our knowledge, the financial statements are free of material misstatements. In any case, we have identified no uncorrected misstatements; b. To the best of our knowledge, the financial statements are free of material misstatements in the sense that the effect of uncorrected misstatements (as summarized in the accompanying list) are immaterial, both individually and in the aggregate, to the financial statements; c. The financial statements contain misstatements that you could consider as material, namely: …. 4. We confirm that we have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud: TEXT TO CHOOSE: a. Following our analysis we have identified no specific risk for our company, resulting from its organisation, its activity or any other factor; b. Following our analysis we need to draw your attention to the specific risks resulting from [for example: numerous cash transactions, activities in certain countries, segregation of functions which is not in place in a certain department, etc.]. TEXT TO CHOOSE: 5. a. We confirm that we have no knowledge of any facts regarding fraud or suspected fraud that could affect the company’s financial statements; b. We confirm that we have reported to you all facts regarding fraud or suspected fraud that could affect the company’s financial statements , of which we have become aware and which involved management, employees who have a significant role in internal control or others, namely: …. TEXT TO CHOOSE: 6. a.We confirm that we have not been notified by whatever person of any allegation of fraud that could affect the financial statements of the entity; b. We confirm that we have reported to you any allegation of fraud that has been notified to us by whatever person (being employed or not by our company), which could affect the financial statements, namely: ….
  • 3. TEXT TO CHOOSE: 7. a.We confirm that we have no knowledge of any situation – proved or suspected – of noncompliance with the laws and regulations applicable to the company, the effect of which should have been taken into consideration when preparing the financial statements; b. We confirm that we have reported to you all known or suspected cases of noncompliance with the laws and regulations applicable to the company the effect of which should have been taken into consideration when preparing the financial statements. TEXT TO CHOOSE: 8. a. We consider that all significant assumptions regarding fair value measurements, including amortization, depreciation and impairments and that the disclosures provided in that respect are reasonable. These assumptions reflect correctly the perspectives of the company and its ability to carry out its specific activities successfully; b. Our company has not carried out and did not have to carry out any fair value measurements, because the perspectives of the company and its ability to carry out its specific activities successfully did not require any amortization, depreciation or exceptional value impairment. 9. We consider that the valuation methods and rules, including, where applicable, the assumptions used for determining fair value within the context of the financial reporting framework applicable to the company, as well as the consistent application of these methods and rules, are appropriate. We confirm to the best of our knowledge and belief that: 10. All events subsequent to balance sheet date that, in accordance with the financial reporting framework, would require adjustment to the financial statements or disclosure in the notes thereto, have been identified and recorded; 11. We have made available to you all accounting records and supporting documentation and all minutes of meetings of shareholders, of the board of directors, of the management committee and of those charged with governance, held during the period from the beginning of the year being audited until now and, in general, all information relevant to your audit; 12. We have disclosed to you all our plans or intentions that may materially alter the book value or classification of assets and liabilities. Where applicable, we have disclosed in the notes to the financial statements the information relevant thereto, in accordance with the financial reporting framework. We have recorded and, where applicable, disclosed all liabilities, even contingent ones, in the notes to the financial statements, in accordance with the financial reporting framework (litigations, material commitments linked for instance to the use of financial instruments, guarantees received and provided, etc.);
  • 4. 13. All transactions have been properly recorded and, where applicable, disclosed in the notes to the financial statements; 14. The company has a satisfactory title to all assets included in the financial statements and appropriate disclosure notes have been provided regarding liens or encumbrances, in accordance with the financial reporting framework. TEXT TO CHOOSE: 15. a.Our company has complied with all contractual obligations [or recommended by the regulatory authorities] that could have a material effect on the financial statements in the event of noncompliance; b. Our company has complied with all contractual obligations [or recommended by the regulatory authorities] that could have a material effect on the financial statements in the event of noncompliance, except for: …. TEXT TO CHOOSE: 16. a. We have not identified any events and matters that would require, in accordance with the financial reporting framework, a restatement of the corresponding figures of the previous year; b. We have not identified any events and matters that would require, in accordance with the financial reporting framework, a restatement of the corresponding figures of the previous year, except for: …. 17. We have exhaustively and appropriately disclosed in the notes to the financial statements all information regarding related parties (directors, etc.) as defined in the financial reporting framework. We have communicated to you all relevant information and documentation on this subject. 18. We have knowledge of the Belgian Anti Money Laundering Law of 11 January 1993 (and its amendments). We confirm to the best of our knowledge that: a. All transactions carried out during the year are of a reliable and normal commercial nature, and relevant to the company’s business objectives; b. During the year, there have been no trade transactions in cash for an amount in excess of the legal limit of 15.000 EUR, nor real estate transactions that involved a cash settlement higher than 10 % of the total price or in excess of the legal limit of 15.000 EUR; c. There has been no transaction whereby funds of third parties were transited via our company’s bank accounts; d. There have been no transactions with entities or persons registered in countries that are qualified by the Financial Action Task Force (FATF) or the Organisation for Economic Co-operation and Development (OECD) as non-cooperative, except for: …; e. We have accepted no share holdings, subscriptions to capital increases or loans originating from or in favour of entities registered in countries that are considered by the tax authorities as tax heavens, offshore centres, except for: ….
  • 5. 19. All information with regard to conflicts of interest as defined in the Company Code has been communicated to you. 20. The Directors’ report on the financial statements includes the information required by article 96 of the Belgian Company Code, including the required description of the principal risks and uncertainties which the company is facing, its foreseeable evolution or the circumstances that could influence significantly its future development, and, where applicable, the justification of the application of the accounting valuations under the going concern assumption. 21. No operations, transactions or actions have been taken disregarding the Belgian Company Code or the bylaws. [22. Possible additional representations for the purpose of the audit depending upon the specific characteristics of the audited company: social purpose, sector of activities, past litigations etc.] (Managing director) (Senior Executive Officer) (Senior Financial Officer) (Other relevant person (or function))

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