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The Letter of representation template produces a standard representation letter for management, partners or directors to sign as part of finalising the accounts, confirming to the accountant that the information provided is complete and that specific representations about the financial statements are accurate. It is a document template rather than a numeric reconciliation: no accounting standard governs its content, and almost every paragraph can be edited or switched off for the client in front of you.

Table of contents 

When should I use this template?

Use it for any UK entity, sole trader, partnership, company or LLP, that needs a signed letter of representation as part of finalising the accounts. It offers all four letter formats, so it can be used whichever accounts package is in place.

Before you start

  • Have the [Unincorporated] General settings - Partnership, [FRS102] General settings, or [FRS105] General settings template completed first, whichever applies. Where present, the entity's legal form and package automatically pick the right default letter type for you, so this needs to be right before you rely on the default.
  • Agree with the client which representations should be included and which do not apply. Most paragraphs can be switched on or off individually, so it is worth deciding this up front rather than editing paragraph by paragraph as you go.
  • If you want firm-wide wording (rather than the standard default) for any paragraph, for example your firm's own standard going concern wording, this can be set centrally in the template's Config Box rather than for each client individually. Ask whoever administers your firm's templates.

Background: what it's for

A letter of representation is a standard part of preparing (not just auditing) a set of accounts. It records, in writing, that whoever is responsible for the business, whether the partners, a sole trader, or the board, has reviewed the financial statements and stands behind specific statements about them, for example that all liabilities have been disclosed, that stock has been properly valued, or that there is no undisclosed litigation. It has no accounting standard of its own to follow. The wording is a matter of the firm's own precedent and professional judgement, so this template is built to be flexible rather than prescriptive.

Steps

  1. Select the type of letter at the top, Corporations, Soletraders, Partnerships or LLP, if it has not defaulted correctly from the general settings template.
  2. Confirm the date the letter is signed, and, for corporations and LLPs, the board meeting date it was minuted at.
  3. Work down the list of representation paragraphs. Each one shows standard default wording, but the text itself is directly editable, so you can rewrite it for the client in front of you.
  4. For Corporations and LLP letters specifically, a further block of optional sections appears below the core paragraphs:
    • Enable FCA Compliance
    • Enable Impairment
    • Enable Deferred tax
    • Enable Payments to sub-contractors
    • Enable Reservation of title
    • Enable Long term contracts
    • Enable Recoverability of inter-company debts
    • Enable Recoverability of old/doubtful debts
    • Enable Guarantees
    • Enable Going concern
    • Enable Exemption from the requirement to prepare audited accounts

  5. Each is switched on or off individually with its own checkbox, plus at least one yes/no question (for example, whether the company held stock at the year end) that swaps in matching default wording when answered. The Partnerships and Soletraders letters do not have this block. Their paragraphs are default wording you edit directly, with no separate show/hide controls.

  6. For the laws and regulations paragraph, choose from the dropdown whether there is nothing to report, whether non-compliance is being disclosed elsewhere, or whether it should be disclosed directly in this letter, and complete the accompanying detail if so.
  7. Use the additional representations area at the end of the list to add any extra client-specific representations not already covered.
  8. Select who signs the letter: for partnerships, choose the signing partner from a dropdown of the partners already entered on the Partners template; for companies and LLPs, choose the signing director or member from the directors and secretaries already recorded for the entity.

What flows through to the rest of the accounts/workflow?

Nothing flows out of this template into other reconciliations. It produces a standalone signed document. It does pull the partner names it offers for signature from the Partners template, and the director/member names from the entity's directors and secretaries records.

What rolls forward next year?

The letter type, all paragraph text, the show/hide choices and the yes/no answers all roll forward as entered, since the representations mostly need to be reconfirmed (and often barely change) year to year. Review each one for continued accuracy rather than assuming last year's wording still applies, particularly the date, any figures quoted in the text, and anything client-specific you have added.

Where the data comes from

  • [Unincorporated] General settings - Partnership / [FRS102] General settings / [FRS105] General settings templates: supply the legal form and package used to choose the default letter type.
  • Partners template: supplies the list of partners available to sign a partnership letter.
  • Directors and secretaries records for the entity: supply the list of directors/members available to sign a corporate or LLP letter.
  • Everything else, meaning the wording of each representation and whether it is shown, is entered or configured directly in this template, or, for firm-wide defaults, in the template's Config Box.

Frequently asked questions

Can I change the standard wording of a paragraph?

Yes, every paragraph is directly editable in the template itself. If you want the same change to apply for every client at your firm, ask whoever administers your templates to set that wording centrally in the Config Box instead of editing it client by client.

Why has a particular representation defaulted to hidden or shown?

The checkbox-controlled optional sections (FCA compliance, impairment, deferred tax, and so on) only exist on the Corporations and LLP letter formats. Switch to one of those if you need to enable or disable them; the Partnerships and Soletraders formats do not have this block at all.

I need a representation that isn't in the standard list, what do I do?

Add it in the additional representations area at the end of the letter. Each one you add is numbered automatically alongside the standard paragraphs.

Does this template check any figures or need reconciling?

No, it is a document template with no numeric calculation or reconciliation of its own.