The auditor is required to request management to provide a written representation confirming it has fulfilled its
Question:
The auditor is required to request management to provide a written representation confirming it has fulfilled its responsibility for the preparation of the financial report.
Sanjita Thapa, an inexperienced auditor has made recommendations to modify the process and simplify the contents of this representation letter (RL) which would significantly improve efficiency and effectiveness of the audit firm. She has made following specific suggestions for future audits
(a) The RL should contain only one sentence like "We confirm having fulfilled all our responsibilities for the preparation of financial statement, as set out in the letter of engagement dated....",
(b) The RL should be issued on the financial year-end date and handed to the auditor on the first workday after the year-end, and
(c) The requirement of the RL may be waived if the current management were not present during the entire period covered by the audit.
Required:
Briefly explain why you agree, or disagree, with each of the three (3) suggestions made by Sanjita.
Auditing and Assurance Services A Systematic Approach
ISBN: 978-1259162343
9th edition
Authors: William Messier, Steven Glover, Douglas Prawitt