GTV Training (Management letter)

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What is a Management Letter?

• ML is prepared for management of our clients

• ML includes the points noted by us during our audit together with our recommendations to help the business develop.

• ML is prepared for management of our clients, and includes the points noted by us during our audit together with our recommendations to help the business develop.

Why Management Letter is needed?

• Help our clients to improve their accounting works, internal control or develop their business

• Facilitate our audit work in next audit

• Reduced audit risk through reducing control risk

• Increase audit efficiency

• Added value

Common Management Recommendation:

• Internal Control weaknesses

• Inefficiencies in the Business

Format of the Management Letter point:

• Observation and Implication

• Recommendation and Management Response

• Observation and Implication, recommendation, management response

• Observation and Recommendation

How many elements make up the internal control system?

• 3

• 4

• 5

• 6

Arrange the steps to evaluate the internal control system?

(1) design and perform tests of controls

(2) reassess control risk and design audit tests that are appropriate

(3) learn about internal control

(4) preliminary assessment of control risk

• 1,2,3,4

• 2,3,1,4

• 3,4,1,2

• 4,1,2,3

Which is not a component of the system of internal control?

• Risk assessment process

• Control environment

• Accounting period

• Control activities

An attitude that includes a questioning mind and a critical assessment of audit evidence is referred to as

• Due professional care

• Professional skepticism

• Reasonable assurance

• Supervision

Which of the followings are internal users of financial statement?

• Management

• Auditors

• Regulators

• Creditors