Getting written representations signed in time
How to prepare a management representation letter under ISA 580, date it as near as possible to the auditor's report and get it e-signed in Achekam.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
The representation letter is often the last document on the file and the first one a reviewer checks for dates. A letter signed three weeks before the auditor's report leaves a gap in which something could have changed that management never confirmed. A letter signed the day after the report means the report was signed without a piece of evidence the standards require. Both happen, usually because the letter was treated as paperwork rather than as part of the audit evidence.
This article covers what the letter is for, what goes in it, how to time it against the report, and how to get it signed electronically without losing control of the date.
What written representations are for
ISA 580 requires written representations from management with appropriate responsibilities for the financial statements and knowledge of the matters concerned. They are audit evidence, and necessary evidence, but they do not on their own give sufficient appropriate evidence about anything. A representation that inventory exists does not replace attending the count.
Their real function is to put on record matters only management can confirm: that they have met their responsibility for preparing the statements, that they gave the auditor everything relevant, and that all transactions are recorded. If management will not put those in writing, that refusal is itself significant evidence.
ACCA's article on completing the audit covers the completion stage as a whole, from reviewing files and evaluating misstatements to subsequent events, going concern and written representations, and shows where the letter sits among those procedures.
Standard and specific representations
Divide the letter into two parts.
Representations every audit needs. Under ISA 580, management confirms that it has fulfilled its responsibility for preparing the statements in accordance with the applicable framework, that it has provided all relevant information and access as agreed in the terms of the engagement, and that all transactions have been recorded and are reflected in the statements.
Representations other standards ask for. Several ISAs require specific written representations. The common ones are:
- fraud and suspected fraud known to management (ISA 240);
- known non-compliance with laws and regulations (ISA 250);
- the belief that uncorrected misstatements are immaterial, with the summary attached (ISA 450);
- litigation and claims (ISA 501);
- the reasonableness of significant assumptions in accounting estimates (ISA 540);
- related parties and their transactions (ISA 550);
- events after the reporting period (ISA 560);
- plans for future action, where going concern is in question (ISA 570).
Add representations specific to this client where the evidence needs supporting, such as management's intention to hold an investment or to renew a facility. Keep them factual and tied to the file. Staff can ask AI in Achekam to draft a procedure's response or a conclusion on a working paper, and a draft enters the file only when a person saves it, but the specific representations themselves should come from the findings on the file, written by the team who knows them.
Timing against the report date
ISA 580 requires the representations to be dated as near as practicable to, but not after, the date of the auditor's report. Plan the sequence backwards from the day the engagement partner will approve the report:
- Statements final, with all agreed adjustments posted and the uncorrected misstatements summary settled.
- Subsequent events procedures brought up to date.
- Representation letter dated and signed.
- Auditor's report approved and dated the same day or immediately after.
If the report slips after the letter was signed, obtain an updated letter, or a short letter confirming the earlier representations remain valid to the new date.
The report step has its own gate in Achekam. The engagement team drafts the auditor's report on standard ISA 700, 705, 706 and 701 wording, approval is refused while any bracketed placeholder remains, and only the engagement partner approves. The partner may approve with papers still open by recording a reason, so make sure the representation letter is not one of them. How the report is drafted and approved is covered in drafting and approving the audit report.
On the completion work item, add the representation letter as its own step. A step is marked done only with a written response and its documents, or set aside with a reason, so the step cannot close until the signed letter is attached.
Sending the letter for e-signature
The practical risk with signing on paper is that the letter sits on a director's desk for a week. Electronic signing gives you a record of exactly when each person signed.
In Achekam, staff prepare the letter for e-signature and add signers, approvers and copied recipients in order. There is no menu entry for the signing console; it opens from the 'Out for signature' tile on My Dashboard, from the document's own page or from the signing templates under Settings, RFI Templates. Each signer signs from an e-mailed link without an Achekam account, and links last 30 days by default.
A sensible order for a company is the financial director first, then the chief executive or the director signing for the board, with the engagement manager copied. When everyone has signed, Achekam produces the signed PDF with a completion certificate listing each signer's e-mail, the times, IP address and browser, and the document's fingerprint, and files it in the client's 'Signed documents' folder. The signing times on the certificate are the evidence a reviewer needs that the letter was signed close to the report date.
Send the letter only when the statements are final. A long link validity is a convenience for slow signers, not a reason to send early. The same signing route for the directors' approval of the statements themselves is described in directors signing statements electronically.
When management refuses to sign
Occasionally management refuses a representation, or wants to change the wording. Find out why first; sometimes a director objects to a phrase rather than the substance, and a clearer sentence solves it.
If management will not confirm that it has fulfilled its responsibility for the statements, given all relevant information or recorded all transactions, ISA 580 requires the auditor to disclaim an opinion. If management refuses a specific representation, reassess the integrity of management and the reliability of other evidence, and consider the effect on the opinion. Either way, record the discussion, the refusal and the partner's conclusion. A refusal that surfaces late is one more reason to send the draft letter to management early, for reading, even though it is signed last.
A practical habit
Send the draft letter, unsigned, with the draft statements. Management reads it while there is still time to question it, the specific representations get challenged before the signing day rather than on it, and the signed letter arrives when the report is ready.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
