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Title: Letters of undertakings and inquiry
Authors: Zammit, Josianne
Keywords: Auditors' reports
Auditing -- Malta
Financial statements
Issue Date: 2011
Abstract: Purpose: The objective of this study is to analyse the significance, usefulness and general including effectiveness of both the letters of undertakings and the letter of inquiry from the perspective of Maltese external auditors. Design: Research data was collected through semi-structured interviews carried out between October and December 2010. Sixteen interviews were conducted and their response thereto analysed. Findings: This study shows that the Letters of Undertakings are used to provide comfort that the company will continue as a going concern since any shortfalls will be financed by the supporting company. The external auditors consider the letters of undertakings as being significant since they are a way of obtaining audit evidence, however, they are of little use since the auditor cannot rely only on the evidence obtained from these letters but rather needs to carry out further audit procedures. With respect to the Letter of Inquiry, it was found that the letter is requested in order to obtain an insight and audit evidence with respect to a particular cases and their outcome. The lawyer's letter is important, especially when there are ongoing cases, however, the usefulness and effectiveness of the letter depends on the amount of detail the lawyers include in their response. Value: It is hoped that this study will encourage further developments in the area by introducing a standard for the letters of undertakings and the letter of inquiry respectively. Other recommendations would be to word the letters of undertakings as a guarantee and to improve the education on these letters, and lastly to reduce the limitations of the lawyer's response with respect to the lawyer's letter.
Description: B.ACCTY.(HONS)
Appears in Collections:Dissertations - FacEma - 2011
Dissertations - FacEMAAcc - 2011

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