Sample Management Representation Letter
for the Year Ended [date]
(Letterhead of Authority)
[Auditor-General/Name of Engagement Controller]
The Audit Office of New South Wales
GPO Box 12
SYDNEY NSW 2001
[date]
Management Representation Letter
[Entity Name]
In connection with your audit of the financial report for the year ended [date], we confirm to the best
of our knowledge and belief, and having made appropriate inquiries of other key employees of the
[entity name], the following representations.
GENERAL
1.
We acknowledge our responsibility for keeping proper accounts and records, and preparing the
financial report.
2.
We believe that, in all material respects, the financial report is presented fairly according to the
requirements of:
3.
a)
the Public Finance and Audit Act 1983
b)
applicable Accounting
requirements; and
c)
[if applicable include reference to other legislation].
Standards
and
other
mandatory
professional
reporting
We believe that, in all material respects, the financial report presents a view which is consistent
with our understanding of the [entity name]’s financial position as at [date], [financial
performance/results of its operations] and its cash flows for the year then ended. [Amend
wording for consolidated entities so representations refer to the 'entity and the economic
entity']
[Delete ‘results of its operations’ and replace with terminology consistent with AASB 1018.
Change to ‘financial performance’ if the entity is not a company.]
4.
There have been no deficiencies in financial reporting practices and we have disclosed in the
financial report any changes to accounting policies.
ACCOUNTING RECORDS AND TRANSACTIONS
5.
We have made available to you all accounting records and have properly recorded all
transactions in the accounting records. This includes:
a)
all legal issues and legal opinions which have the capacity to be relevant to the fairness
of the financial report
b)
minutes of all meetings (eg Board meetings, Audit Committee or other management
meetings); and
c)
all off-balance sheet agreements or instruments.
COMPLIANCE WITH LEGISLATION AND OTHER REQUIREMENTS
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6.
We are not aware of any breaches or possible breaches of relevant legislation, contracts or
agreements.
7.
In respect to operations during the year, we have complied with:
a)
all Cabinet and other Government directives, including Ministerial directions issued under
(name of Act and the SOC Act); and
b)
all central regulatory agency financial reporting requirements.
8.
We have notified you of any activities or operations conducted which are not specifically
required by [enabling legislation/program statements].
9.
We have notified you of:
10.
a)
any misappropriated cheques where a loss of public moneys seems likely (TD 218.9)
b)
any losses, defalcations or deficiencies that are of serious proportions or have serious
implications (TD 455.01)
c)
(Departments Only) any bank accounts opened or altered during the year (TD 416.02)
d)
(Departments Only) all approved variations of authorised payments from the Consolidated
Fund (The Annual Appropriations Act [Current Year])
e)
the existence of all controlled entities within one month of their creation (Section 63B of
the Public Finance and Audit Act 1983)
f)
any transactions or arrangements capable of being regarded as ‘private sector funded
infrastructure’, outsourcings of significant areas of activity or any other matters dealt
with in Part 2B of the Public Authorities (Financial Arrangements) Act 1987 ; and
g)
all Cabinet and other Government directives [including Ministerial directions issued under
(name of Act and the SOC Act)].
We have prepared contract summaries for all transactions covered by the ‘Working with
Government policy’ (Ministerial Memorandum 2001-18) and submitted these summaries to the
Auditor-General for audit within 30 days of the contract becoming effective.
INTERNAL CONTROLS
11.
We acknowledge our responsibility for implementing and operating accounting and internal
control systems that are designed to prevent and detect fraud and error.
12.
Adequate systems of internal control exist to ensure that:
a)
we record all material transactions in the accounting records underlying the financial
report
b)
we minimise the risk of fraud and error occurring and are able to detect them should they
occur; and
c)
we minimise the risk of significant breaches of legislation and other mandatory
requirements occurring and detect significant breaches of legislation and other
mandatory requirements should they occur.
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13.
No fraud or misappropriation, or suspected fraud or misappropriation have occurred known to
management of [entity name]
[OR]
We have disclosed to you all significant facts relating to any fraud or suspected frauds known to
us that may have affected the entity.
14.
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.
INTERNAL AUDIT
15.
We operate an effective internal audit function and management promptly rectify any
shortcomings reported.
FINANCIAL REPORT
Non-Current Assets
16.
The [entity name] controls all assets recognised in the Statement of Financial Position. There are
no liens or encumbrances on assets nor has any asset been pledged.
17.
We depreciate assets over their useful lives and we have adjusted depreciation charges for all
important items of property, plant and equipment that have been abandoned or are otherwise
unusable.
18.
Depreciation rates have been reviewed having regard to such factors as asset usage and the rate
of technical and commercial obsolescence. Any adjustment to reflect the most recent
assessment of the useful lives of all non-current assets has been recognised and disclosed in the
financial report.
19.
The carrying amounts of each physical non-current asset in the class do not materially differ
from its fair value at the reporting date [for all agencies required to apply TPP 03/02, and
other entities that elect to carry assets at valuation].
Doubtful/Bad Debts
20.
The allowance for doubtful debts is sufficient to provide for any losses on realisation of
receivables and we have written off all known bad debts.
Inventories
21.
The [entity] has no obsolete or excess inventories.
Other Current Assets
22.
We expect to realise all other current assets at least at the amounts at which they are stated in
the financial report.
Liabilities
23.
We have recognised all liabilities in the financial report.
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Provisions, Contingent Assets and Contingent Liabilities
24.
We have recognised or disclosed in the financial report:
a)
arrangements involving restrictions on cash balances, compensating balances and line-ofcredit or similar arrangements
b)
agreements to repurchase assets previously sold
c)
material or contingent liabilities or assets, and
d)
onerous contracts, to the extent that they exceed the unrecognised assets.
Commitments
25.
We have disclosed in the financial report all material commitments.
Statement of Financial Performance
26.
Except as disclosed in the financial report, the results for the year were not materially affected
by:
a)
extraordinary items
b)
errors, including fundamental errors; or
c)
changes in accounting policy.
Taxation [Delete if not relevant]
27.
We have calculated income tax expense, provision for deferred income tax, and future income
tax benefit according to the definitions of taxable income and allowable deductions contained
in [NSW Treasury's guidelines relating to the Taxation Equivalent Regime / the 'Manual for the
National Tax Equivalent Regime' released by the Australian Taxation Office - delete whichever is
not applicable].
28.
We have calculated and recognised all other applicable taxes according to relevant tax
legislation.
29.
There are no activities that invoke the anti-avoidance provisions of the Tax Equivalent Regime or
other applicable tax legislation.
Related Party Transactions
(Companies Reporting Under AASBs Only)
30.
We have made full disclosure in the financial report of information concerning related parties
and related party transactions in accordance with applicable Australian Accounting Standards.
Director Related Disclosure
(Statutory Bodies and State Owned Corporations Only)
31.
We have made full disclosure in the financial report of information concerning directors and
director related transactions in accordance with applicable legislative requirements.
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(All Entities)
32.
We have made available to you details and records relating to:
a)
any agreements or transactions between employee controlled entities and any of our
controlled entities/this entity (delete whatever is not applicable)
b)
any equity interests or directorships held by employees in other entities, which are party
to, directly or indirectly, any agreements or transactions with this organisation and/or
any controlled entity or related party of this organisation; and
c)
any external accounting advice received on these agreements, transactions or interests.
Accounting for Investments in Associates
33.
We have made available to you details and records relating to the existence and ownership of
equity interests held in associates (i.e. entities over which [entity name] has significant
influence).
Environmental Issues
34.
We have considered whether environmental matters could have a material impact on the
financial report and conclude that:
a)
we are not aware of any material liabilities or contingencies arising from environmental
matters, including those resulting from illegal or possibly illegal acts
b)
we are not aware of environmental matters that may result in a material impairment of
assets; or
c)
if aware of such matters referred to in parts (a) and (b) above, we have disclosed to you
all facts relating to those matters.
Accounting Misstatements Detected by Audit
35.
We acknowledge that the attached uncorrected misstatements have been brought to our
attention.
36.
We have considered the impact of uncorrected misstatements on the financial report. We
conclude uncorrected misstatements are quantitatively and qualitatively immaterial to the
financial report taken as a whole, when considered individually or in aggregate.
37.
We have also considered the impact of uncorrected misstatements from previous periods and
conclude that the aggregate amount of uncorrected misstatements from previous and current
periods is immaterial.
GENERAL
Native Title Land Claims
38.
We are not aware of any native title land claims:
a)
that may have a material impact on the financial report; or
b)
if aware of native title land claims that may have a material impact on the financial
report, we have disclosed all facts relating to those claims to you.
Insurance
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39.
We have established procedures to assess the adequacy of insurance cover on all assets and
insurable risks, and where appropriate, assets and insurable risks are adequately covered by
insurance.
Going Concern
40.
In our opinion, the going concern basis is appropriate for the financial report.
Events Occurring After Reporting Date
41.
From the financial reporting date of the financial report to the date of this letter, we are not
aware of any events that have occurred which are of such importance that we need to disclose
or recognise them in the financial report.
Electronic Presentation of the Audited Financial Report and Audit Report
42.
We recognise that we are responsible for the electronic presentation of the financial report.
43.
We will ensure that the electronic version of the audited financial report and the Independent
Audit Report presented on [entity name]'s web site are the same as the signed version of the
audited financial report which bears the Auditor-General's seal and the Independent Audit
Report.
44.
We clearly differentiated between audited and unaudited information in the construction of
[client name]'s web site and understand the risk of potential association between unaudited and
audited information in the absence of appropriate controls.
45.
We have assessed the security controls over audited financial information and the Independent
Audit Report and are satisfied that procedures in place are adequate to ensure the integrity of
the information provided.
46.
We ensure that where the Independent Audit Report on the financial report is provided on
[entity name]'s web site, the financial report is also provided in full.
Other
47.
[You should address all other issues relevant to the audit under this heading.]
[Agencies entering into derivative instrument transactions may be required to make additional
representations about these transactions. Example representations are included in Auditing and
Assurance Guidance Statement AGS 1030 “Auditing Derivative Financial Instruments” para.92].
..................................................................
Chief Executive’s Title
..................................................................
Chief Financial Officer’s Title
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