What status do written representations from management have as audit evidence?
Answer and explanation
Correct answer: A. They are necessary but cannot replace other appropriate evidence
- Step 1: The representation letter confirms management has met its responsibilities and supports certain judgements.
- Step 2: They come from the entity, so they are less reliable than independent evidence, and cannot replace other evidence.
Answer
They are necessary but cannot replace other appropriate evidence.
Why not the others: They are not the most reliable form and cannot replace other procedures. Tests of controls do not remove the need for written representations. They do have value, though limited.
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