Management Representation Letter

Question 1

What would be the effect on an audit opinion of management’s unwillingness to sign the management representations letter?

Answer 1

This would be considered a scope limitation, probably resulting in disclaimer or withdrawal.

Question 2

What periods should be covered in the management representations letters?

Answer 2

All periods included in audit report

Question 3

List the members of management who are responsible for signing the management representations letter.

Answer 3

The chief executive officer (CEO) and chief financial officer (CFO)

Question 4

When should the management representations letter be dated?

Answer 4

It should have the same date as the auditor’s report.

Question 5

What are the two basic categories of issues usually addressed by the management representations letter under the AICPA’s clarified auditing standards?

Answer 5

Financial statements

Information provided

Question 6

What is the purpose of obtaining the required management representations letter?

Answer 6

To document in writing the essence of management’s verbal responses to the auditor’s important verbal inquiries.