Which of the following statements regarding the letter of representation is not correct?
A) It is prepared on the client's letterhead.
B) It is addressed to the CPA firm.
C) It is signed by high-level corporate officials, usually the president and chief financial officer.
D) It is optional, not required, that the auditor obtain such a letter from management.

Question

Quizplus · Accepted Answer

The letter of representation is required by auditing standards, and failure to obtain one without adequate explanation should result in a disclaimer of opinion or withdrawal from the engagement. The letter is prepared and signed by high-level corporate officials, usually the president and chief financial officer, and is addressed to the CPA firm. It is not prepared on the client's letterhead as it is an official communication from management to the auditor.

Which of the Following Statements Regarding the Letter of Representation