Prior-year management letter points: clear, carry, or concede
A practical way to triage last year’s auditor recommendations before the new planning meeting.
Management letter points linger when nobody decides whether remediation is complete. Auditors notice; boards notice later.
Clear with evidence
If you strengthened a control, keep the policy change, sample of new reconciliations, and the date it took effect. A verbal assurance that “we fixed it” rarely closes the point.
Carry with a plan
Some points need capital spend or system changes that will not finish before year-end. Document the interim compensating control and the target completion quarter.
Concede residual risk
Occasionally management accepts a limitation — for example, a small overseas cash location that cannot be counted every period. Put that acceptance in writing so it does not reappear as a surprise finding.
Tie the triage to this year’s PBC
Each open point should either produce a document in the current binder or an explicit note that the auditor should retest. That link is part of how we run audit readiness reviews.
Bring last year’s letter to your next liaison briefing; it shortens the scoping conversation considerably.