Management Letter for Estate of Alexander P Spencer

Management Letter
15th November, 2015
George E Spencer
Estate of the Late Alexander P Spencer
Dear Sir,
We have recently completed audit of estate of Alexander P Spencer, same is conducted
according to provisions of International Standards on Auditing. According to those standards, we
do planning for audit and perform the audit in such manner, so that we can obtain sufficient and
appropriate audit assurances that the data which we are checking is free from material
misstatement. We do gather such assurance not for commenting on internal controls but for
having base for expressing opinion. And our audit does not relieve the management from there
responsibility.
However in course of such normal practice, we want to draw you kind consideration on
important matters found, those are listed below:-
We Would Like to Draw your attention on the difficulties which we come across during
verification of estate, Alexander moved into to a age care unit about 5 years ago and most of his
financial records were lost at that time, as the records are not completely available, we are trying
to gather them, in the absence of complete records, administration of those documents relating to
estate is difficult.
a) As stated above, we do audit of estate and such audit is performed according to
International Standards of Auditing, those Standards required us to obtain reasonable
assurance that there is no material misstatement in records, We are required to check
whether records are free from material misstatement to express an appropriate opinion
and give advice on them.
b) We are in process of keeping records relating to Alexander estates together, filling of
those records is under process.

c) Our administration process of records / Audit of records are a step by step gradual
process, those processes takes time, in performing those process we keep Professional
skepticism, so that nothing will remain doubtful for you to a great extent, those process
are performed with an appropriate planning.
d) Our opinion is based upon facts of the case and opinion changes according to the facts
provided and documents produced before us.
e) For Alexander’s estate we have following records :-
Commonwealth Bank
12thSeptember 1991 Share Purchase $6,480
1st November 1993 Share Purchase $7,480
22nd July 1996 Share Purchase $9,000
14th November 1997 Share Purchase $6,675
National Australia Bank
15th April 1983 Purchase 1000 Share $2,420
In both of the above case Alexander has participated in Dividend Reinvestment Plan and
has acquired additional shares through bonus issue and New issues.
As stated above that Alexander has opted DRP for both shares, we would explain what
actually happens in DRP, DRP is Dividend reinvestment plan, under which company in
which one has made investment, receives a offer form company to receive shares in lieu
of dividend and in such case investor do not receive dividend in cash on quarterly basis,
however some shares may be given by said company instead of dividend, even though
investor do not receive dividend in cash, he is required to pay tax on said dividend which
has been received in form of shares (Foundation of taxation law,2016)
Under this scheme, dividend is immediately invested for the purpose of compounding
and price appreciation, and with nil brokerage charges. Under this scheme investor do not
require to accumulate cash and then purchase shares, in this scheme investor will receive
shares in fractions in accordance with dividend amount.