Management representation
Management representation is a letter issued by a client to the auditor in writing as part of audit evidences. The representations letter must cover all periods encompassed by the audit report, and must be dated the same date of audit work completion. It is used to let the client's management declare in writing that the financial statements and other presentations to the auditor are sufficient and appropriate and without omission of material facts to the financial statements, to the best of the management's knowledge. It serves to document management's representations during the audit, reducing misunderstandings of management's responsibilities for the financial statements.
Is it Reduce at the risk and liability of Auditors?
The possibility of misunderstandings between the auditor and
management is reduced when
oral representations are confirmed by management in writing.
Written representations requested from management may be limited to matters
that are
considered either individually or collectively to be material to the financial
statements.