S&H Associates has just performed an audit of Bob's Bikes. S&H was unable to obtain a written representation from management about internal control. Which of the following is true?
A)S&H must still assume that management has assessed the effectiveness of internal control.
B)Depending on other factors in the audit, S&H can still issue an unqualified opinion.
C)S&H should consider this situation a limitation on the scope of the audit.
D)Management does not need to give S&H a letter if it has disclosed all known internal control deficiencies.

Question

Quizplus · Accepted Answer

The absence of a written representation from management about internal control is a limitation on the scope of the audit. S&H is required to obtain written representations from management about the assessment of internal control as part of its audit procedures. Without this representation, S&H cannot rely on management's assessment of internal control and must perform additional procedures to evaluate internal control. Therefore, S&H should consider this situation a limitation on the scope of the audit.

S&H Associates Has Just Performed an Audit of Bob's Bikes