Letter of representation: a guide for UK accountants

What is a letter of representation?

A letter of representation (also called a management representation letter) is written confirmation from a client’s directors to their accountant or auditor. It covers matters the accounts rely on that the accountant cannot fully verify independently, such as whether every record and transaction has been provided.

For audits it is required by ISA (UK) 580, Written Representations. Accountants preparing accounts without an audit commonly obtain one too, following their professional body’s guidance for accounts preparation engagements.

What a letter of representation usually includes

The exact wording depends on the engagement, but letters typically confirm:

• The directors' responsibility for preparing accounts that give a true and fair view
• That all accounting records and relevant information have been made available
• That all transactions have been recorded and reflected in the accounts
• Related party relationships and transactions
• Events after the balance sheet date that could affect the accounts
• The directors' assessment that the company is a going concern
• Known or suspected fraud, and non-compliance with laws and regulations
• Any specific judgements or estimates the accountant has relied on

Tailor the letter to the client. A generic letter that confirms things that do not apply weakens its value as evidence.

Who signs it, and when

The directors sign on behalf of the company, often the same director who signs the balance sheet. It should be signed at the point the directors approve the accounts. For an audit, it is dated as near as practicable to, but not after, the date of the auditor’s report.

That timing is why it belongs in the same request as the accounts: if the letter arrives separately, the dates drift apart and practices end up chasing two signatures instead of one.

Sending it with the accounts

A typical year-end pack in PractiSign contains the statutory accounts, the corporation tax computation or CT600, and the letter of representation. Each director receives one invitation, reviews every document and signs them together.

• Signature and date fields are placed once in a template and reused every year.
• Each director can be asked to sign, while the practice copy is view-only.
• The completed pack comes with an evidence record tied to the exact versions signed.

See how the annual accounts workflow handles this end to end.