According to SSARS 19, representation letters must be dated on the same date as the review report. Also, the review report should be dated on the date the review engagement is complete–the date all work and technical reviews are complete.
So how do I make the stars align? How do I get the client to sign the representation letter on the same date that I complete the review engagement? Or is there another way to solve this problem? Let’s see.
It’s February 3rd and you expect to complete your review engagement on the 7th–the date the partner will review the file and the report. So you have the representation letter typed (with a February 7, 2014 date) and sent to the client, but the client leaves town unexpectedly. It’s the 12th before the owner can actually sign the representation letter. Argh!
So how can we solve this dating problem?
Use an “as of” date.
Include in your representation letter language such as the following:
We confirm, to the best of our knowledge and belief, as of February 7, 2014, the following representations made to you during your review.
As long as the signature date (the date at the top of the letter) does not precede the “as of” date (e.g., February 7, 2014, in our example), you are okay. Using our example scenario, the “as of” date and the date of the review report is February 7, 2014; the date of the letter and date the client signs the letter is February 12, 2014.
Must I be in physical receipt of the representation letter before I date the review report?
SSARS 19 (AR 90.24) states:
The accountant need not be in physical receipt of the management representation letter as of the date of the accountant’s review report, provided that management has acknowledged that they will sign the representation letter without modification.
Must I be in physical receipt of the representation letter prior to the issuance of the review report?
SSARS 19 (AR 90.24) states that the representation letter must be “received prior to the release of the report.” This issue is often solved with an exchange–the CPA hands the report to the client and the client hands the representation letter to the CPA, or the representation letter is emailed to the CPA and the CPA emails the report to the client.