Draft format of Management Representation Letter on Statutory Audit

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Management Representation Letter on Statutory Audit

management representation letter format ICAI

The Management Representation Letter is required to be furnished before the Financial Statements are signed. The auditor should obtain representations from management, wherever considered appropriate. The auditor should obtain evidence that management acknowledges its responsibility for the appropriate preparation and presentation of financial information and that management has approved the financial information.

A sample format of management representation letter (for a company under the Companies Act, 2013) is given below which is required to be tailored for each circumstance.

Written representations are an important source of audit evidence as per "SA 580 WRITTEN REPRESENTATIONS". Although written representations provide necessary audit evidence, they do not provide sufficient appropriate audit evidence on their own about any of the matters with which they deal. Representations by management cannot be a substitute for other audit evidence that the auditor could reasonably expect to be available. For example, a representation by management as to the quantity, existence and costs of inventories is no substitute for adopting normal audit procedures regarding verification and valuation of inventories. Accordingly if you are stating "Valuation of Stock is taken as certified by the management " in your Tax Audit/ Stat Audit then don't do that.

Furthermore, the fact that management has provided reliable written representations does not affect the nature or extent of other audit evidence that the auditor obtains about the fulfillment of management’s responsibilities, or about specific assertions.

I have attached herewith draft management representation letter as per the Practitioner’s Guide to Audit of Small Entities issued by the ICAI. Also included representation w.r.t. compliance with accounting software with audit trail function. However, being draft format you must make necessary changes and modifications as per each circumstances and given format of management representation letter can not be considered as standard one.

Download management representation letter here.

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Comments

Unknown said…
Very useful
thank you very much for providing this invaluable information in structured way
November 17, 2022 at 11:56 AM
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