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Auditing & Assurance › Audit Evidence & Procedures

What is a management representation letter and what is its purpose?

Intermediate

Answer

It's a written statement from management confirming responsibilities and specific assertions (e.g., that all information was provided, liabilities are complete, and estimates are reasonable), dated the same as the auditor's report. It's necessary audit evidence but complements, not substitutes for, other evidence—the auditor can't rely on it alone for matters that should be corroborated.
Real-world example Before signing, the auditor obtains a signed representation letter confirming completeness of liabilities and disclosure of related parties.

Common follow-ups: Can representations replace other evidence? | When is the letter dated?

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All 18 Audit Evidence & Procedures questions