Question

True or False

69.          It is important that the representation letter be signed by one or more officers or responsible employees who are knowledgeable about the particular area or activity reported upon.

70.          Since the representation letter refers to events occurring in the subsequent period, it is appropriate that the letter be signed, dated, and delivered to the auditors on the last day of field work.

Answer 1

69. False

A management representation letter is a form letter written by a company's external auditors, which is signed by senior company management. The letter attests to the accuracy of the financial statements that the company has submitted to the auditors for their analysis. The CEO and the most senior accounting person (such as the CFO) are usually required to sign the letter. The letter is signed following the completion of audit fieldwork, and before the financial statements are issued along with the auditor's opinion

70.False

Management representation is a letter issued by a client to the auditor in writing as part of audit evidences. The representations letter must cover all periods encompassed by the audit report, and must be dated the same date of audit work completion.