What does the Management Statement mean?

Written statements of various important oral statements provided by the management of the audited entity to the Note during the audit. The date of the management statement is usually the same as the date of the auditor's report. It is usually signed by the general manager and the chief financial officer.

Definition: Management statement refers to the statements about the financial statements provided by the management of the audited entity to the certified public accountant.

1) Clarify management's responsibilities for financial statements. The management of the audited entity makes a positive statement on the authenticity, legitimacy and completeness of the relevant information provided to the certified public accountant in the statement, and clearly admits that it is responsible for the financial statements;

2) Provide audit evidence. The statement of the management of the audited unit shall record the management's reply to the inquiry of the certified public accountant in written form, which can be used as written evidence.

The written statement of the management statement is the management statement (1) Definition: The management statement refers to the statements on the financial statements provided by the management of the audited entity to the certified public accountant.

2) Role: Management statements have the following two basic functions:

The first is to clarify the responsibilities of management for financial statements.

The second is to provide audit evidence.

3) Management statements are not a substitute for other audit evidence.

CPAs should not substitute management statements for additional audit evidence that can reasonably be expected to be obtained.

4) Handling of management statements that contradict other audit evidence.

If a statement by management contradicts other audit evidence, the CPA should ask management about it. If management is unable to provide a reasonable explanation, or if the explanation given is insufficient, it indicates that there may be a problem with the integrity of management, and the reliability of the statements made by management needs to be reconsidered.

2. Management Statement The management statement includes both written and oral statements. Written statements are usually more reliable as audit evidence than oral statements.

General requirements: Management should send the declaration directly to the CPA himself/herself. The declaration shall include the information requested, be duly dated and signed.

Main contents: (1) about financial statements; (2) about the completeness of the information; (3) Recognition, measurement and presentation.

Date of Signing: The date stated in the management statement usually coincides with the date of the audit report.

Signatory: The management statement is usually signed by the person in the management who is primarily responsible for the auditee and its finances.

(1) management recognizes its responsibility to design and implement internal controls to prevent or detect and correct misstatements;

2) Management believes that the uncorrected misstatements identified by the CPA during the audit do not have a material impact on the financial statements as a whole, either individually or in aggregate. A summary of the uncorrected misstatement should be included in or appended to the written statement.