During the final stage of the first audit of Nairobi National Bank Ltd. You request the client to provide you with a letter of representation. The Client reads representations you are requesting and refuses to furnish the letter. The client states its position to be as follows:-―You are asking us to tell you all manner of things which we appointed you to find out. You are requesting us to say such things as ‗all the transactions undertaken by the bank have been properly reflected in the accounting records ‘and yet we pay you to carry out the audit. You should know whether these statements are true or not; required: Explain the reliability of a letter of representation as audit evidence and the extent to which the auditors could rely on this evidence

The letter of representation is considered reliable audit evidence because:-

It provides written confirmation of managements representation. It therefore has more credibility than oral evidence especially in instances where the management representations in the letter appear reasonable and consistent with other sources of audit evidence.

The reliability if the evidence will also depend on whether the individuals making the representations can be expected to be informed on the matter.

If the letter of representation is contradicted by other evidence, the auditor should investigate the circumstances and where necessary, reconsider the reliability of other representations made by management.
The Company‘s Act make it an offense to give the auditor false information thus the management is bound to provide the auditor with information that is true.

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