Final answer:
An auditor should obtain written management representations for management's compliance with contractual agreements that may affect financial statements. This is a key part of the evidence collected during an audit, supporting the governance structures in place to ensure trustworthy financial reporting.
Step-by-step explanation:
For which of the following matters should an auditor obtain written management representations? Among the options provided, the auditor should obtain written management representations for management's compliance with contractual agreements that may affect the financial statements. It is also common to require written representations concerning management's responsibility for the design and implementation of internal controls to prevent and detect fraud. Although management's acknowledgment of its responsibility for employees' violations of laws may be relevant, it is not a typical request for a written representation in standard auditing practice.
Written management representations serve as a part of the audit evidence a company's external auditor collects during the audit process. Where financial information is subject to oversight by institutions such as the auditing firm and the board of directors, written representations provide the auditor with formal statements by management regarding their responsibility for the financial information they present, akin to a sort of 'management declaration.' This procedure helps ensure that the company's governance structures, including oversight by outside investors such as large shareholders, can rely on the audited financial statements. The importance of these structures was highlighted by the failure in the case of Lehman Brothers, where inaccurate financial information compromised investor trust.