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Firms having system reviews are required to submit a representation letter to their team captain as evidence that the firm's management is not aware of any situations where it or its personnel has not complied with state board(s) of accountancy or other regulatory bodies rules and regulations (including all applicable licensing requirements), has made available communications* relating to allegation or investigations of deficiencies (including litigation) within the three years preceding the firm's current peer review year end and through the date of the exit conference, has provided the reviewer with a list of all client engagements with periods ending during the year under review and has provided the reviewer with any other information requested by the reviewer. The letter should be signed by those members of management responsible for knowledge of the matters covered in the representations and the firm's system of quality control. For system reviews, the representation letter should be dated the same date as the peer review report.
Failure or refusal to furnish a representation letter constitutes a failure to cooperate with the reviewer and thus the administering entity and the AICPA Peer Review Board and the firm would be subject ofair procedures that could result in the firm's enrollment in the program being terminated.
*Types of organizations relevant to meeting the objectives of this requirement:
(This list not intended to be all-inclusive)
AICPA or State CPA Society Ethics Committees
AICPA Joint Trial Board
State Boards of Accountancy
Security and Exchange Commission
Public Company Accounting Oversight Board
State Auditor
Department of Labor
Employee Benefits Security Administration
General Accounting Office
Office of Management and Budget
Department of Housing and Urban Development
Federal Deposit Insurance Corporation
Office of Thrift and Supervision
Federal or State Inspector General's Offices
Other governmental agencies or organizations that have the authority to regulate accountants (in connection with the firm's accounting, auditing or attestation practice)
Legal letters (in connection with the firm's accounting, auditing or attestation practice)
Sample Representation Letter That has No Significant Matters to Report
Date
To the Team Captain:
We are providing this letter in connection with the peer review of [name of firm] as of the date of this letter and for the year ended [year end date].
We understand that we are responsible for complying with the rules and regulations of state boards of accountancy and other regulators. We confirm, to the best of our knowledge and belief, that there are no known situations in which [name of firm] or its personnel have not complied with the rules and regulations of state board(s) of accountancy or other regulatory bodies, including applicable firm and individual licensing requirements in each state in which it practices for the year under review. We have also provided a list of all engagements to the [team captain] with periods ending during the year under review. For attestation engagements, including financial forecasts or projections, the list included those engagements with report dates during the year under review. We have also provided the [team captain] with any other information requested, including communications by regulatory, monitoring or enforcement bodies relating to allegations or investigations in the conduct of accounting, audit or attestation engagements performed and report on by the firm, whether the matter relates to the firm or its personnel, within three preceding the current peer review year-end. In addition, there are no known restrictions or limitations on the firm's or its personnel's ability to practice public accounting by regulatory, monitoring or enforcement bodies within three years preceding the current peer review year-end. We have also discussed the content of our PCAOB inspection report with the [team captain] (if applicable).
Sincerely,
[Name of reviewed firm]
Sample Representation Letter Tailored to Report a Matter of Noncompliance With a Regulatory Requirement
(The firm should tailor the language in this illustration to its specific situation and may refer to attachments if necessary.)
Date
To the Team Captain
We are providing this letter in connection with the peer review of [name of firm] as of the date of this letter an for the year ended June 30, 20XX.
We understand that we are responsible for complying with the rules and regulations of state boards of accountancy and other regulators. Other than the firm not having a practice unit license during the year under review in one state where the firm practices (which has been subsequently obtained), we confirm, to the best of knowledge and belief , that there are no known situations in which [name of firm] or its personnel have not complied with the rules and regulations of state boards of accountancy or other regulatory bodies, including applicable firm and individual licensing requirements in each state in which it practices for the year under review. We have also provided a list of all engagements to the [team captain] with periods ending during the year under review. For attestation engagements, including financial forecasts or projections, the list included those engagements with report dates during the year under review. We have also provided the [team captain] with any other information requested, including communications by regulatory, monitoring or enforcement bodies relating to allegations or investigations in the conduct of accounting, audit or attestation engagements performed and report on by the firm, whether the matter relates to the firm or its personnel, within three preceding the current peer review year-end. In addition, there are no known restrictions or limitations on the firm's or its personnel's ability to practice public accounting by regulatory, monitoring or enforcement bodies within three years preceding the current peer review year-end. We have also discussed the content of our PCAOB inspection report with the [team captain] (if applicable).
Sincerely,
[Name of reviewed firm]
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