The management letter is separate from the auditor's report and is not public. It contains findings in areas such as accounting processes, information systems and the authorisation and approval structure, their possible effects and recommendations.
A well-prepared management letter turns the audit from a legal obligation into a tool that adds value for management. Following up prior-year findings is also part of the next audit.
Source: BDS 265
Related terms
Internal controlProcesses and controls designed by management to provide reasonable assurance regarding the effectiveness of operations, the reliability of financial reporting and compliance with laws and regulations.Independent auditReasonable assurance provided by an independent auditor on whether the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.Audit committeeA committee of the board of directors responsible for overseeing financial reporting, internal control, internal audit and the independent audit.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.
Last updated: October 22, 2026 · This definition is for general information only.