Consider the audit procedure to obtain a representation letter from the client at the end of the audit. The staff accountant on the engagement questions the necessity for this procedure, saying, "Isn't this procedure silly? I give the client a copy of the representation letter and ask them to type it on the company's letterhead. What good is this letter if I tell the client what to say? Couldn't they just say that they did what I told them to do and didn't really understand what they were signing?"
a. How would you answer this question?
b. How does the representation letter provide important audit evidence to the auditors? Why is it a required audit procedure?

  • CreatedJanuary 22, 2015
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