What is the importance of the management letter issued by the auditors?
A management letter is a written communication by the auditors to management and those charged with governance that reports significant deficiencies and material weaknesses identified in the audit, in accordance with Statement on Auditing Standards No. 112. Although the auditor is not required to perform specific procedures to identify deficiencies in internal control or to express an opinion on the effectiveness of the entity’s internal control in the audit of financial statements, the auditor may become aware of deficiencies in internal control during the course of the audit. These deficiencies are communicated to the audit committee or to the board of directors, if no audit committee exists. Understanding the deficiencies in internal control identified by the auditors can provide an insight regarding the auditors’ perception of the effectiveness of internal control implemented by management and will allow management to put in place additional procedures to strengthen controls and re
