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:
a) Explain to the client the purpose of the letter of representation.
(6 marks)
b) Describe the nature of the content of a letter of representation. Your
answer should be illustrated with specific examples of items which may
appear in a letter of representation.
(6 marks)
c) Explain the reliability of a letter of representation as audit evidence and
the extent to which the auditors could rely on this evidence.
(5 marks)
d) Explain the consequences of your client‟s refusal to furnish a letter of
representation.

(3 marks)