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AICPA CPA-Auditing Exam - Topic 3 Question 27 Discussion

Which of the following expressions most likely would be included in a management representation letter?
A) No events have occurred subsequent to the balance sheet date that require adjustment to, or disclosure in, the financial statements.
B) There are no significant deficiencies in internal control identified during the prior-year's audit of which those charged with governance are unaware.
C) We do not intend to provide any information that may be construed to constitute a waiver of the attorney-client privilege.
D) Certain computer files and other required audit evidence may exist only for a short period of time and only in computer-readable form.

AICPA CPA-Auditing Exam - Topic 3 Question 27 Discussion

Actual exam question for AICPA's CPA-Auditing exam
Question #: 27
Topic #: 3
[All CPA-Auditing Questions]

Which of the following expressions most likely would be included in a management representation letter?

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Suggested Answer: A

Choice 'a' is correct. It is appropriate for the representation letter to contain a statement regarding subsequent events.

Choice 'b' is incorrect. The representation letter typically includes information in four categories: financial statements; completeness; recognition, measurement, and disclosure; and subsequent events.

The communication of significant deficiencies in internal control does not fall within these categories.

Choice 'c' is incorrect. The representation letter typically includes information in four categories: financial statements; completeness; recognition, measurement, and disclosure; and subsequent events.

A waiver of attorney-client privilege does not fall within these categories.

Choice 'd' is incorrect. While this may be an accurate statement, it is not something that would be included in the management representation letter. The representation letter typically includes information in four categories: financial statements; completeness; recognition, measurement, and disclosure; and subsequent events.


by Shawnda at May 04, 2022, 02:15 AM

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Latanya
8 months ago
Not sure about C, that sounds a bit too defensive.
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Freeman
9 months ago
I agree with A, it's pretty much a given.
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Lenita
9 months ago
Surprised D is even an option, that seems too vague!
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Margo
9 months ago
I think B is more common, though.
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Shala
9 months ago
Definitely A, that's a standard statement in those letters.
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Beatriz
9 months ago
Hmm, this one seems tricky. I'll need to carefully read through the details about the workers' comp program and how it interacts with the group health plan.
upvoted 0 times
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Latanya
9 months ago
Antitussives, got it. That was a pretty easy one, in my opinion. As long as you know the basic drug groups, questions like this are pretty straightforward.
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Marshall
10 months ago
I think G.729 is often mentioned for low bandwidth situations, so it might be a good fit here, right?
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