Purposes of management Letter

Procurement and Audit notes revision

• Enables the auditor to give his comments on the procurement records that he has examined during the course of the audit. Areas of weakness in internal control system which my result to material errors will be

highlighted and brought to management’s attention together with advice as
to their improvement.
• Provides management with other constructive advice regarding areas where efficiency may be improved.
• Communicates matters arising during the audit so that there is a written record of all such matters. In case of litigation, the auditor may rely on the management letter for defence.
• Ensures auditor’s comments on the procurement on the internal control system reach those responsible members of management who have powers to act on the findings.
A report to management will normally be a natural way of adding value to the client and the auditor should incorporate the need to report in the planning of the audit. Before documenting the weaknesses in management letter, the auditor should discuss these with the appropriate officials. This eliminates the possibility that the auditor may have misunderstood. The operation of the system and will also enable the company take quick corrective actions. The management letter should be addressed to the board of directors or the audit committee.
The timing of the management letter will vary. It will often be useful to complete the compliance tests before its submission, so that weaknesses in internal control system may be included.
However, serious weaknesses discovered should be reported immediately. This may make it necessary to submit more than one management letter.

Procurement and Audit notes revision

(Visited 503 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published.