Management representation letter
| Management representation letter |
|---|
| See also |
Management representation letter is a specialized letter issued by a company to external auditors. Purpose of this document is to confirm the accuracy of financial statement that company had submitted to the auditors for verification [1].
These statements from part of the audit evidence, but they do not replace other necessary control procedures that are confirmed by these statements [2].
Preparation of the management representation letter
During the integrated audit, the management provides various informations to the external auditor. At the end of the audit, the auditor must obtain written declarations from the management. These statements relate to certain issues that relate to internal control over financial statements, but also financial reporting [3].
The management representation letter [4]:
- is prepared on letterhead,
- it must be addressed to the auditor,
- must be signed by persons responsible for financial and operational matters.
Most often the responsibility is borne by a CEO or CFO. The management representation letter should be dated at the latest on the day of the auditor is report [5]. These are serval elements that should be included in the management representation letter [6].
The purpose of the management representation letter
The purpose of the management representation letter is [7]:
- remaining the management of it is responsibilities in the area of internal control over the financial reporting,
- remaining the management of it is responsibilities in the area of internal control over the financial statements,
- reducing the level of misunderstandings by requiring management to make a statement and provide oral statements in writing.
Footnotes
- ↑ Bruke F.M., Guy D.M., Tatum K.W., 2008, p.14.14
- ↑ Crumbley D.L., Rezaee Z., Ziegenfuss D.E., 2004, p.271
- ↑ Bruke F.M., Guy D.M., Tatum K.W., 2008, p.14.14
- ↑ Crumbley D.L., Rezaee Z., Ziegenfuss D.E., 2004, p.271
- ↑ Crumbley D.L., Rezaee Z., Ziegenfuss D.E., 2004, p.271
- ↑ Crumbley D.L., Rezaee Z., Ziegenfuss D.E., 2004, p.273-274
- ↑ Bruke F.M., Guy D.M., Tatum K.W., 2008, p.14.14
References
- Beasley M.S., Carcello J.V., (2009) GAAS Guide 2009: A Comprehensive Restatement of Standards for Auditing, Attestation, Compilation, and Review CCH a Walters Kluwer business
- Boyd K.W., (2014) CPA Exam For Dummies John Wiley&Sons, Inc.
- Bragg S., (2018) Management representation letter
- Bruke F.M., Guy D.M., Tatum K.W., (2008) Audit Committees: A Guide For Directors, Management, and Consultants. Fifth Edition CCH a Wolters Kluwer business
- Crumbley D.L., Rezaee Z., Ziegenfuss D.E., (2004) U.S. Master Auditing Guide. Third Edition CCH Incorporated
- Get Through Guides, (2007) ACCA: For Exams in December 2007 and June 2008 Get Through Guides
Author: Anna Lipowiecka-Migdał
