FirmHello
Tour Who it's for Features Security Pricing About
AU AUD

Currency and local tax terms

United States USD Canada CAD United Kingdom GBP Australia AUD
Get started
For auditors and the clients they audit

An Australian management representation letter under ASA 580

The last document in an audit file, and the one most often signed without being read. It usually arrives as the auditor's draft. It has to go back as management's own statement.

A management representation letter is written by the client's management to the auditor, on the client's letterhead, confirming in writing what management has told the auditor during the audit. In Australia the requirement is ASA 580, made by the AUASB under section 336 of the Corporations Act 2001. It applies to audits of annual and half-year financial reports under the Act and to any other audit of a financial report.

Last reviewed against 2 primary sources.

Free download

Management representation letter

The full letter in Word and PDF, written for Australia, for the client to put on its own letterhead and sign.

Download the PDF Download for Word

No email required.

Next step: send it to the client through FirmHello, where it stays on their record beside everything else they send you.

Get started

Written representations are audit evidence, but ASA 580 is explicit that they never provide sufficient appropriate evidence on their own for any matter they cover. What the letter adds is management's signature under the responsibilities it accepted in the engagement letter, and confirmation that it has met them.

The template below follows the AUASB's illustrative letter, including its Australian paragraphs. The signed copy is one more document to collect from the client at year end, which is work a client portal for accounting firms is built for.

What every representation letter has to cover

AU-C 580, CAS 580, ISA (UK) 580 and ASA 580 differ in wording but agree on the core. A letter without these is not the letter the auditor asked for.

  1. 1

    The responsibilities from the engagement letter

    That management has fulfilled its responsibility for preparing the financial statements under the applicable framework, described the way the engagement letter described it. This is the representation that ties the two letters together.

  2. 2

    Information, access and complete records

    That management gave the auditor all relevant information and the access agreed in the terms of the engagement, and that every transaction has been recorded and is reflected in the statements.

  3. 3

    The matters other standards add

    Fraud and suspected fraud, non-compliance with laws and regulations, litigation and claims, related parties, subsequent events, accounting estimates, and uncorrected misstatements, with a list of the uncorrected items attached.

  4. 4

    Addressed to the auditor, dated at the end

    The letter is addressed to the auditor and covers every period the report covers. The auditor's report cannot be dated before the representations, so the letter is signed when the report is ready, not when fieldwork closes. If the audit requests went through a client portal for accounting firms, send the draft the same way, so the signed copy comes back to the file it belongs in.

The management representation letter

Written for Australia. The downloads are the same text, in Word and PDF, for the client to put on its own letterhead.

[Client letterhead]

[Date: as near as practicable to, but not after, the date of the auditor's report]

[Audit firm name]
[Audit firm address]

Purpose of this letter

This representation letter is provided in connection with your audit of the financial report of [Company name] Pty Ltd for the year ended 30 June [year], for the purpose of expressing an opinion as to whether the financial report gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001.

[Only if agreed with you: for the purpose of these representations, we have not treated as exceptions misstatements below $[amount], the threshold you communicated to us. This amount is not the materiality used for the financial report.]

We confirm, to the best of our knowledge and belief, having made such enquiries as we considered necessary for the purpose of appropriately informing ourselves:

The financial report

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated [date], for the preparation of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001; in particular, the financial report gives a true and fair view in accordance with them.

2. The methods, the data and the significant assumptions used in making accounting estimates, and their related disclosures, are appropriate to achieve recognition, measurement or disclosure that is reasonable in the context of Australian Accounting Standards.

3. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with Australian Accounting Standards.

4. All events after the date of the financial report for which Australian Accounting Standards require adjustment or disclosure have been adjusted or disclosed.

5. The effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to the financial report as a whole. A list of the uncorrected misstatements is attached.

Information provided

6. We have provided you with access to all information of which we are aware that is relevant to the preparation of the financial report, such as records, documentation and other matters; additional information you have requested for the purpose of the audit; and unrestricted access to persons within the company from whom you determined it necessary to obtain audit evidence.

7. All transactions have been recorded in the accounting records and are reflected in the financial report.

8. We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud, and we have disclosed to you the results of our assessment of the risk that the financial report may be materially misstated as a result of fraud.

9. We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of and that affects the company and involves management, employees who have significant roles in internal control, or others where the fraud could have a material effect on the financial report.

10. We have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the financial report communicated by employees, former employees, analysts, regulators or others.

11. We have disclosed to you all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing the financial report.

12. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial report, and they have been accounted for and disclosed in accordance with Australian Accounting Standards.

13. We have disclosed to you the identity of the company's related parties and all the related party relationships and transactions of which we are aware.

Other information and the Corporations Act

14. We have informed you of all the documents we expect to issue that may comprise other information. [Either: The financial report and the other information you obtained before the date of your report are consistent with one another, and the other information contains no material misstatement.] [Or: We will issue the remaining other information by [date] and provide it to you so that you can complete your procedures.]

15. We have provided you with all requested information, explanations and assistance for the purposes of the audit.

16. [Where applicable:] We have provided you with all information required by the Corporations Act 2001.

Matters specific to this audit

[Add any further representations the auditor has requested, such as those on going concern or on comparative information. Delete this section if there are none.]

Signed

[Name], [Managing Director / Chief Executive Officer]

Signature ______________________

[Name], [Chief Financial Officer]

Signature ______________________

Attachment: list of uncorrected misstatements

Before you use this

Supplied as-is, with no guarantee. These templates are general information, not legal advice, and not a substitute for it. Have your own legal adviser review and adapt one to your practice and your jurisdiction before you put it in front of a client. FirmHello accepts no responsibility or liability for any use made of them.

What ASA 580 adds for an audit in Australia

ASA 580 is the AUASB's counterpart of ISA 580, made under section 336 of the Corporations Act 2001. Its Australian additions carry the prefix "Aus", and most of them point the letter at the Act rather than at the auditing standards.

The illustrative letter adds two Aus confirmations: that management has provided all requested information, explanations and assistance for the audit, and, where applicable, all information the Corporations Act requires. Both are in the template above as items 15 and 16.

The access duty behind the letter

ASA 580 points to section 312 of the Corporations Act as an example of a regulatory requirement to provide information to the auditor. Officers must give the auditor access to the books and any information or assistance the audit needs, so the letter confirms a legal duty, not a courtesy.

When management will not sign

An Aus paragraph says what the auditor would ordinarily do next: draw the attention of those charged with governance to the auditor's statutory rights of access, consider the effect on the auditor's report, and consider whether a refusal has to be reported to a regulator.

A declaration is not a letter

A formal statement of compliance with the law, or of approval of the financial report, does not give the auditor enough to be satisfied that every representation was consciously made. A directors' declaration of that kind does not replace the letter.

Other information

The Australian illustrative letter includes representations on other information: that management has named every document it expects to issue that may contain it, and when it will provide any the auditor has not seen by the report date.

Where Australian representation letters go wrong

Signed before the report is ready

ASA 580 dates the representations as near as practicable to, but not after, the date of the auditor's report, and the auditor cannot date the report before them. A letter signed at the close of fieldwork covers nothing that happened after it, which is when subsequent events tend to surface.

A draft the signers never opened

The auditor drafts the letter so that it describes management's responsibilities the way the engagement letter did. The representations remain the signers' own. A chief financial officer who signs sixteen of them unread has not made them, and the auditor who relies on that letter has less than it thinks.

A threshold from another year

The auditor may communicate a threshold for the representations, in the same way it sets the level below which misstatements are clearly trivial. It is a threshold for exceptions in the letter, not the materiality for the financial report, and it is set for this audit, not copied from the last one.

Related letters

Audit Audit Compilation Compilation What it is Engagement letters Accounting Accounting

Questions about management representation letters

Who writes the management representation letter, the auditor or the client?

Management gives it; the auditor usually drafts it. It goes on the client's letterhead, is addressed to the auditor and is signed by the client, because the representations are the client's own. If any of them is not true as drafted, the letter should be modified to show the exception, not signed as it stands.

Who should sign it?

People with responsibility for the financial statements and knowledge of the matters in the letter. The standards name the chief executive and the chief financial officer, or their equivalents, as the people representations may be requested from. Someone who joined partway through the year still signs for the whole period: arriving late does not reduce the responsibility.

Can management add "to the best of our knowledge and belief"?

Yes. The auditor may accept that wording when the signers have the responsibilities and knowledge the letter assumes. A reconfirmation of the responsibilities agreed in the engagement letter is different: that part is not made subject to management's knowledge and belief.

What happens if management will not sign?

It depends which representation is refused. If management will not confirm that it has met its responsibility for the financial statements, or that it gave the auditor all relevant information and recorded every transaction, the auditor cannot express an opinion on the statements. Refusing a narrower representation makes the auditor reassess management's integrity and the rest of the evidence, and it can still change the opinion.

How do firms collect the signed letter?

As one item on the year-end request list, beside the trial balance, the confirmations and the schedules, so it is chased with everything else rather than remembered on the morning the report is dated. The client signs in ink or through the signing provider the firm already uses, then uploads the signed copy. FirmHello keeps that copy on the engagement's request list and in its document vault; it does not collect signatures itself.

Is this representation letter template enough on its own?

No. It is a starting point built on the auditing standard for Australia. Other standards add representations on their own subjects, the engagement will need its own, and a review or compilation follows a different standard altogether. Your methodology, your professional body's guidance and your own adviser should all see it before it is used.

Sources

The primary sources this page is written against, last read against it on . Check them before relying on a detail; rules and thresholds change.

  1. Federal Register of Legislation ASA 580 (compiled 22 March 2023, F2023C00330, latest in force)
  2. AUASB ASA 210

What changed

  • Added an editable Word (.docx) copy of the letter beside the PDF.

The letter is the easy half

Sending it, getting it back signed, and finding it again in two years is the half that eats the week. That is what the portal is for.

No card and no sales call. If you would rather tell us about your firm first, use the longer form.