APPENDIX 10

Letter of Representation on Internal Control

(Suitable for use from a line manager to more senior

management, the audit committee, or to Internal Audit;
sometimes known as "Comfort Letter"; a related concept is
the "Accounting Declaration")

"Short Form" example1 and 2

From: A Line Manager

To: Internal Audit

or to:
Line Manager immediately senior (copy Internal Audit)

or to:
The Audit Committee (copy Internal Audit) in the case of the most senior
executive management

Re.: Representations on internal control

Date:

I confirm that the objectives I am responsible for achieving are clearly defined and understood. I
acknowledge that the development and maintenance of effective internal control to provide
reasonable assurance of the achievement of these objectives are amongst my key managerial
responsibilities. I am confident I understand what this entails and have been given the necessary
authority to achieve these outcomes.

Having monitored achievement of my objectives and the functioning of the internal control
arrangements in place within my area of responsibilities I consider that throughout 19XX internal
control has been adequate to provide reasonable assurance of effective and efficient operations, of
internal financial control, and of compliance with laws and regulations; and that these
arrangements have been complied with in all material respects throughout this period.

I have communicated to my staff the essential elements of an effective system of internal control
and have ensured that (a) they are aware of their responsibilities especially in areas of potential
critical risk and (b) they have been empowered to operate appropriate control procedures
effectively.
All staff within my area of responsibility, at all levels, have been appraised of their duty to report
upwards unresolved matters of concern about internal control and to deal expeditiously and
effectively with such matters reported to them. In reporting upwards, staff have been
empowered, without risk of victimisation, to by-pass intermediate levels of management where
they consider this to be necessary. I have taken appropriate steps to confirm that no matters
remain unresolved as a result of this process. All such matters drawn to my personal attention by
staff have been dealt with to my satisfaction.

No findings or recommendations relating to internal control made by internal or external audit or

by others remain outstanding.

I have considered whether significant changes have been made to business practices in my area of
responsibility which may have weakened internal control and believe that this is not the case.
Furthermore our plans for future change have been appraised in the context of their internal
control impact and I believe these issues have been addressed satisfactorily.

I am unaware of any weaknesses in control or irregularities in accounting practice which should

be drawn to your attention.
ENDNOTES
1. While this is described as a "short form" letter, it does force the correspondent to conclude in general managerial
terms with respect to his/her responsibilities for internal control and the quality of internal control. It does not address
specific controls.

2. Drafted as an example of an unqualified letter of representation. Departures and exceptions should be incorporated
by the correspondent.