Friday, April 23, 2010

Representation Letter

April 23, 2010

Thomson Jimenez Associates
5th Floor, Dale Building
Dela Rosa Cor. Salcedo Streets
Legaspi Village , Makati City


This representation is provided in connection with your audit of the financial statements of Sparrows Training Center for the year ended December 31, 2009, for the purpose of expressing an opinion as to whether the financial statements present fairly in all material respects the financial position of the Company and of the results of its operations and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards. We appreciate that all the information you require in order to form an opinion on the financial statements may not be available from an examination of the accounting records and other documents, and that you have obtained representations from the local management. The management acknowledges full responsibility for the fair preparation of the financial statements in accordance with Philippine Financial Reporting Standards (PFRS). We further acknowledge our responsibility for the design and implementation of internal control to prevent and detect fraud. We confirm, to the best of our knowledge and belief the following representations:


1. We have recorded or disclosed, as appropriate, all liabilities, both actual and contingent.

2. Full provision has been made in the financial statements for all material losses expected to arise from legal action, third party claims and off-balance sheet contracts. No other claims in connection with litigation have been or are expected to be received.

3. Except as indicated in the financial statements, none of the liabilities, including those secured by reservation of title, were at the balance sheet dates, secured on any assets of the Company.

4. All commitments to buy or sell securities or businesses, bonus or profit sharing arrangements, losses arising from sale and purchase commitments and arrangements and options to buy back assets previously sold have been properly recorded and where appropriate, adequately disclosed in the financial statements.


5. The Company has satisfactory title to all the assets, and all assets disposed of or belonging to third parties have been correctly reflected in the financial statements. Where applicable, assets have been written down to provide for any impairment.

6. Unless where specifically disclosed in the financial statements, the assets were owned by the Company free of any charge, encumbrance or lien.

7. All income which arose to the date of the balance sheet has been brought into the financial statements in accordance with the company’s accounting policies. In particular, all transactions have been reflected in the financial statements and the balance sheet includes all bank accounts and other money market deposits which belong to the company.

8. There are no formal or informal compensating balance arrangements with any of our cash and investment accounts. We have no other lines of credit arrangements.

9. Deferred expenditure and prepayments included in the balance sheet are deferred to be matched against income which can with reasonable certainty be expected to accrue after the balance sheet date.

10. We have made available to you all books of accounts and supporting documentation and all minutes of directors and shareholders meetings namely those held from beginning of year under audit up to the date of issuance of your audit report.


11. We confirm the completeness of the information provided in regards to the identification of, and balances and transactions with, related parties. Amounts charged /credited to the related parties accounts are confirmed. All transactions with related parties including remuneration and arrangements, transactions or agreements to provide credit facilities to the directors and officers of the Company have been fully disclosed in the financial statements.

12. There were no significant irregularities involving management or employees who have a significant role in internal control or that could have a material effect on the financial statements. Nor have there been any allegations of fraud or suspected fraud, affecting the company’s financial statements communicated by employees, former employees, analysts, regulators or others. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.

13. The financial statements are free of material misstatements, including omissions.

14. The Company has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance. We confirm that the company has fully complied with all the statutory and legal requirements that could have a material effect on the financial statements in the event of non-compliance including payment of all applicable taxes, duties and other statutory obligations.

15. There have been no subsequent events since the balance sheet date which necessitate revision of the amounts included in the financial statements or inclusion of additional disclosure. Should any material events occur, which may necessitate the revision of the amounts or inclusion of further disclosure, we shall advise you accordingly.

16. There are no plans or intentions that may materially alter the carrying value or the classification of assets and liabilities reflected in the financial statements.

17. We have reviewed the effect of the attached summary of unadjusted errors aggregated during the audit and believe that these are immaterial, both individually and in aggregate, to the financial statements taken as a whole.

18. We have reviewed all the adjustments and journal entries proposed arising out of the audit and confirm our acceptance thereof.

19. We are aware that the company is incurring losses and has a deficit as of December 31, 2009. We, however, believe that the going concern basis is appropriate in preparing the financial statements for at least 12 months from the date the above financial statements are approved by the board for issue.

Yours faithfully,

Ashley Amanda S. Tisdale
Accounting Manager

No comments: