Chapter 24 Auditing
Question 3: Amira Nadim, an auditor, has prepared a letter of representation for the president
and controller to sign. It contains references to the following items: 1. Inventory is fairly stated at
the lower of cost or market and includes no obsolete items. 2. All actual and contingent liabilities
are properly included in the financial statements. 3. All subsequent events of relevance to the
financial statements have been disclosed. Required: a. Why is it desirable to have a letter of
representation from the client concerning these Required matters when the evidence accumulated
during the audit is meant to verify the same information? b. To what extent is the letter of
representation useful as audit evidence? Explain. c. List several other types of information
commonly included in a letter of representation..
Chapter 24 AuditingQuestion 3 Amira Nadim, an auditor, has prepar.pdf
1. Chapter 24 Auditing
Question 3: Amira Nadim, an auditor, has prepared a letter of representation for the president
and controller to sign. It contains references to the following items: 1. Inventory is fairly stated at
the lower of cost or market and includes no obsolete items. 2. All actual and contingent liabilities
are properly included in the financial statements. 3. All subsequent events of relevance to the
financial statements have been disclosed. Required: a. Why is it desirable to have a letter of
representation from the client concerning these Required matters when the evidence accumulated
during the audit is meant to verify the same information? b. To what extent is the letter of
representation useful as audit evidence? Explain. c. List several other types of information
commonly included in a letter of representation.
