The gap between the period ending and today

Your report covers the twelve months to the 31st of May. Today is the 2nd of October. A buyer reads the report this afternoon and forms a view about your company as it is this afternoon.

Four months of that view rests on nothing in the document. Somebody will suggest a letter covering the gap, and the letter is a real thing that does a real job — a much smaller job than its name implies.

Who signs it, and why that is the whole story

Management signs it. Usually an officer of the company — the person who signs the description of the system in the report itself is the obvious candidate, because the letter is a continuation of the same assertion rather than a new kind of document.

The audit firm may be involved in preparing it, and some firms will confirm separately that they issued the report and what period it covered. Neither of those is an opinion about the gap. The distinction is not a technicality: the value of the report comes from somebody independent having tested things, and there is nothing in the gap for that independence to attach to. What is in the gap is your word.

So the letter's weight is the weight of your word, and the reader knows it. That makes it useful in exactly the circumstance where your word is already worth something — an existing customer, a short gap, a relationship with a history — and nearly worthless in the circumstance where somebody is deciding whether to trust you at all.

Something people say

“A bridge letter extends the report to cover the gap, so with one we can say the controls have been examined right up to today.”

Why it spreads

The name says bridge, which describes a thing that carries weight across a gap. It arrives on company letterhead, often alongside the report, and it genuinely does answer the question procurement asked. And for most buyers it works: the document is accepted, the deal proceeds, and nobody ever discovers what it did and did not contain.

The part that is true

The letter is not a trick and it is not empty. It is a dated assertion by a named officer that nothing material has changed, which is a real commitment with real consequences for the person who signed it if it turns out to be false. It also tells a reader something they genuinely want to know and could not otherwise get: that the organisation is willing to say so in writing.

A buyer asks what your letter covering the four-month gap establishes. Which answer is accurate?

That the controls continued to operate through the gap, as testedThat an officer of the company has stated in writing that they are not aware of material changes since the period closedThat the audit firm has confirmed the controls are still in placeNothing at all — it is a formality with no content

What to do about the gap itself

Three honest moves, in descending order of how much they cost you.

Shorten it. The gap is a consequence of where the period closes and how long the fieldwork takes. An organisation that intends to be current all year ends up with periods that run back to back, which is the subject of track 7 and is more expensive than it sounds.

Say what you monitor. The letter asserts that management is unaware of changes. A reader's obvious next question is how management would become aware, and an answer — the thing that alerts, the review that runs, the person who sees it — is worth more than the letter. It is also a question about your own controls rather than about a document, which means you can actually answer it.

Name the date of the next report. A gap with a closing date reads as a schedule. A gap with no closing date reads as a position.

Check

Your period closed four months ago and a prospective customer, new to you, asks for current assurance. What is the most defensible package?

Choose one answer

The report plus a letter covering the gap, and nothing elseThe report, the letter, the date the next period closes, and a description of what would tell you a control had stoppedA fresh point-in-time examination covering todayDecline the letter and explain that the report speaks for itself

Check answer

›Why gaps exist at all, and why they are often longer than they lookOptional

The gap is not slack. It is the fieldwork leg from the previous lesson, arriving after the period has already closed.

A period that ends on the 31st of May is tested through June and into July, and the report is issued some weeks after that. So on the day the report lands there is already a gap of a month or two, built in, before anybody has delayed anything. From there it grows by a day a day until the next period closes.

Which means the typical gap over a year is not small. A report issued in July about a period ending in May is current in July, four months stale by October, and seven months stale by the time the next one closes — and the only thing that changes during all of that is the letter's date.

Worth remembering

• A period report never speaks to the gap between the period closing and today, and that gap grows by a day a day.
• The letter covering the gap is a management assertion, signed by an officer of your own company, that they are not aware of material changes to the controls described.
• Nothing is tested in the gap, so there is no independent opinion about it to extend; the letter changes who is making the claim, not how much of the timeline is examined.
• A firm may confirm it issued the report and what period it covered, which is a statement about a document rather than about the gap.
• The letter does not get stronger over a longer gap — the same sentence covers more unexamined time, so its value falls as the gap grows.
• The strongest thing you can add to it is a description of how you would find out a control had stopped, because that speaks to the gap from evidence.
• A gap of one to two months exists on the day the report is issued, because the fieldwork happens after the period closes.