Example of a Management Representation Letter

(Entity Letterhead)

(To Auditor) (Date)

This representation letter is provided in connection with your audit of the financial statements of [ABC
Company] (the “Company”) for the year ended December 31, [20XX] for the purpose of expressing an
opinion as to whether the financial statements give a true and fair view of (present fairly, in all material
respects) the financial position of the Company as of December 31, [20XX] and of the results of its
operations and its cash flows for the year then ended in accordance with [indicate applicable financial
reporting framework].

On behalf of the Company, we acknowledge our responsibility for the fair presentation of the financial
statements in accordance with [indicate applicable financial reporting framework].

We confirm, to the best of our knowledge and belief, the following representations:

1. There have been no material1 irregularities involving management or employees who

have a significant role in internal control or that could have a material effect on the
financial statements.

2. We have made available to you all books of account and supporting documentation and
all minutes of meetings of shareholders and the board of directors. [To be added if
needed for statutory reasons: namely those held on XX.XX, 20XX and XX.XX, 20XX,
respectively.]

3. You have been provided all the relevant2 information regarding the identification of related
parties.

4. We are not aware of any material misstatements in the financial statements, including
material omissions.

5. We are not aware of any material non-compliances with contractual agreements that
could have a material effect on the statutory financial statements.

6. There has been no material noncompliance with requirements of regulatory authorities

that could have a material effect on the financial statements in the event of non-
compliance.

7. The following have been properly recorded and, when appropriate, adequately disclosed
in the financial statements:
(a) The identity of, and balances and transactions with, related parties;
(b) Losses arising from sale and purchase commitments;
(c) Agreements and options to buy back assets previously sold;
(d) Assets pledged as collateral; and
(e) Material guarantees, whether written or oral, under which the Company is contingently liable.

8. The Company has no current plans or intentions that may materially alter the carrying
value or classification of assets and liabilities reflected in the financial statements.

1
For the purposes of this letter, materiality is defined in relation to statutory financial statements.
2
For the purposes of this letter the term relevant is defined in relation to statutory financial statements.
 9. The Company has no current plans to abandon lines of product or other plans or
intentions that will result in any excess or obsolete inventory, and no inventory is stated at
an amount in excess of net realizable value.

10. The Company has satisfactory title to all owned assets and there are no liens or
encumbrances on the Company’s assets [, except for those that are disclosed in Note X
to the financial statements].

11. We have recorded or disclosed, as appropriate, all material liabilities, both actual and
contingent[, and have disclosed in Note X to the financial statements all material
guarantees that we have given to third parties].

12. We acknowledge the Company’s responsibility for the design and implementation of
programs and controls to provide reasonable assurance that fraud is prevented and
detected.

13. We have no knowledge of any fraud or suspected fraud affecting the Company involving:
(a) Management,
(b) Employees who have significant roles in internal control over financial reporting, or
(c) Others where the fraud could have a material effect on the financial statements.

14. The Company has disclosed to you any allegations of material fraud or suspected fraud
affecting the Company received in communications from employees, former employees,
analysts, regulators, short sellers, or others.

(As to items 12, 13, and 14, we understand the term "fraud" to mean those matters described in ISA
240.)

15. We have disclosed to you all deficiencies in the design of operation of internal control
over financial reporting of which we are aware.[ If management is not aware of any
deficiencies, this representation should be replaced with “We are not aware of any
deficiencies in the design or operation of internal control over financial reporting”]

16. The effects of the uncorrected financial statements misstatements summarized in the
accompanying schedule are immaterial, both individually and in the aggregate, to the
financial statements taken as a whole. [If there are no SUD items, this representation
should be removed.]

Following representation only if applicable and needed for specific local statutory reasons:

17. Other than . . . described in Note X to the financial statements, there have been no
events subsequent to period end which require adjustment of or disclosure in the financial
statements or Notes thereto.

18. The . . . claim by XYZ Company has been settled for the total sum of XXX which has
been properly accrued in the financial statements. No other claims in connection with
litigation have been or are expected to be received.

19. There are no formal or informal compensating balance arrangements with any of our
cash and investment accounts. Except as disclosed in Note X to the financial statements,
we have no other line of credit arrangements.
 20. We have properly recorded or disclosed in the financial statements the capital stock
repurchase options and agreements, and capital stock reserved for options, warrants,
conversions and other requirements.

(Senior Executive Officer of the Company)

(Senior Financial Officer of the Company)