CPA Exam — AUDPerforming Further Procedures and Obtaining EvidenceMedium
Which of the following is an example of a written representation that an auditor would typically obtain from management?
- AA confirmation from a bank regarding the client's cash balance.
- BA letter from the client's legal counsel regarding pending litigation.
- CAn internal control questionnaire completed by client personnel.
- DA statement acknowledging responsibility for the fair presentation of financial statements.
Show answer & explanationAnswer & explanation
Correct answer: D. A statement acknowledging responsibility for the fair presentation of financial statements.
A written representation letter from management includes a statement acknowledging their responsibility for the fair presentation of the financial statements in accordance with the applicable financial reporting framework. This is a mandatory component of the audit and directly comes from management.
Why the other options are wrong
- A. This is an external confirmation, not a written representation from management.
- B. This is an inquiry of legal counsel, not a written representation from management.
- C. An internal control questionnaire is a tool used by the auditor to understand controls, not a representation from management.
Written Representations
A letter from management to the auditor confirming certain matters and supporting other audit evidence. It is required for all financial statement audits.
- Acknowledges management's responsibility for the financial statements and internal controls.
- Confirms that management has provided all relevant information.
- Addresses specific assertions or matters relevant to the audit.
Memory trick: Written Reps: Management's Promise, Auditor's Assurance.