Towards the end of an audit, it is common for the external auditor to seek a letter of representation (written representations) from the management of the client company.Required: Explain why auditors seek letters of representation


  • Auditors seek a letter of representation in order to obtain written audit evidence on matters that are material to the financial statements when other sufficient appropriate audit evidence cannot reasonably be expected to exist (ISA 580 ‗Management Representations‘).
  •  Representations may be the only evidence, which can reasonably be expected to be available, but they cannot be a substitute for other audit evidence that could reasonably be expected to be available. Such matters may include management‘s intention to hold an item for long-term appreciation.
  •  The letter also ensures that directors acknowledge their collective responsibility for the presentation and approval of the financial statements. The letter is signed by those with knowledge of the matters concerned, on behalf of management
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