How is the letter of management representation useful

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Question - Barrok Joseph, CPA, has prepared a letter of representation for the president and controller to sign. The following items are contained in it:

Inventory is fairly stated at the lower of cost or market and includes no obsolete items.

All actual and contingent liabilities are properly included in the financial statements.

All subsequent events, relevant to the financial statements, have been disclosed.

Required -

(1) Why is it desirable to have a letter of management representation letter from the client concerning these matters when the evidence accumulated during the course of the audit is meant to verify the same information?

(2) How is the letter of management representation useful as audit evidence?

(3) What are several other types of information commonly included in the management representation letter?

Reference no: EM133171699

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