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Good Day,
I am a bit confused as to whether written representations and management letter are the same. Can you please clarify for me? Thank you.
Jerma
The term ‘management letter’ usually refers to a letter sent by the auditors to the company setting out weaknesses in their internal control, the possible consequences and how to fix the weaknesses.
A letter of representation is sent from the directors to the auditors confirming matters such as all liabilities have been included, there is no intention to close any part of the business, inventory is valued at the lower of cost and NRV etc.
Thank you
Is a letter of representation or written representation written by directors but obtained from management to be given to auditors as an evidence that they have valued the inventory at the lower of cost and NRV.
Is a weak form of evidence because is an internal source only?
Many thanks
B
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