The management representation letter _______.
A)can sometimes be used as a substitute for the gathering of audit evidence
B)is not a substitute for obtaining sufficient, appropriate evidence regarding the financial statements through other audit procedures
C)can replace analytical procedures conducted as part of the audit, but cannot replace the audit of internal control
D)can replace the audit of internal control conducted as part of the audit, but cannot replace the analytical procedures

Question

Quizplus · Accepted Answer

The management representation letter is a document signed by management stating that they have provided all necessary information to the auditor and that the financial statements are complete and accurate. It is not a substitute for obtaining sufficient, appropriate evidence regarding the financial statements through other audit procedures. It is an additional source of evidence and provides corroborative support for other audit evidence gathered. Therefore, option B is the correct choice. Option A is incorrect because the representation letter cannot be used as a substitute for the gathering of audit evidence. Option C and D are also incorrect because the representation letter cannot replace analytical procedures or the audit of internal control.

The Management Representation Letter _______