Client Letter

[dagenheis]

Can someone comment from their experience if its a normal practice for the client to sign a separate representation letter before the annual accounts/CT return is filed or the engagement letter is deemed to be sufficient for outlining the responsibilities of the company director?

[Sockpuppet]

Not normal.

[Clare@InTouch]

Sorry to disagree Sockpuppet, but this is totally normal.

The Engagement letter sets out the terms of business between you, and the Letter of Representation sets out the basis on which the accounts have been prepared.

Having worked in 4 different accounting practices, all of which were Chartered, all of them issued a letter of rep at year end. It's recommended by the Institute. I'd suggest the only time you wouldn't get one is if your accountant isn't regulated.

[philip@wellwoodhoyle]

Yes, absolutely normal as Clare says. Standard practice for chartered accountants.

[Contreras]

This thread prompted me to check and it seems my accountant is chartered but not regulated - or at least I can't see anything about a regulating body on their web site.

I've never received or signed a separate letter of representation. We do have a letter of engagement (signed by both parties), which includes sections on "Responsibilities of the directors" and "Scope of the accountants work".

He just does the CT600 and annual financial statement for me. I only sign these once I am satisfied with the numbers and he gets paid when I see that they have been filed.

So far never had a complaint. I know anyone can call themselves an accountant but is it possible to be chartered and not regulated and should I be concerned if that is the case?

[Jessica@WhiteFieldTax]

Sorry to disagree Sockpuppet, but this is totally normal.

The Engagement letter sets out the terms of business between you, and the Letter of Representation sets out the basis on which the accounts have been prepared.

Having worked in 4 different accounting practices, all of which were Chartered, all of them issued a letter of rep at year end. It's recommended by the Institute. I'd suggest the only time you wouldn't get one is if your accountant isn't regulated.

I'm going to disagree in part.

IME a Letter of Representation is only used in Statutory Audit cases - I think it would be unusual in non Statutory Audit assignments even where the accounts are prepared by a regulated firm. To clarify for non accountants, Statutory Audit only applies to larger businesses, with a £6m turnover and.or £3m balance sheet - i.e. not the typical CUK reader whose accounts will not be audited.

Some firms may use one for non audit reporting assignments, but I think it would be uncommon; more usual is for the client to sign a declaration on the accounts that the accounts are correct. Sometimes clients may be asked to sign a separate confirmation / authorisation for submission of the CT600 - I suppose its a moot point when that becomes detailed enough to be called a letter of representation.