Auditors are required to obtain representation letters from the auditee’s lawyer to elicit information on claims and possible claims that may affect the financial statements.
a. Discuss the audit evidence provided by a lawyer’s letter.
Explain which assertions and financial statement amounts the lawyer’s letter relates to. What other audit evidence is available for these assertions, if any?
b. What other evidence may be available to an auditor that can corroborate the completeness of the claims the auditee has listed in the lawyer’s letter?
c. What should be the effective date of the lawyer’s letter? Why?