As part of an audit, a CPA often requests a management representation letter from the entity. Which one of the following is not a valid purpose of such a letter?
A)To provide audit evidence.
B)To emphasize to the entity their responsibility for the fairness of the financial statements.
C)To satisfy himself or herself that a certain account balance is fairly stated when certain customary auditing procedures are not performed.
D)To provide possible protection to the CPA against a charge of knowledge in cases where fraud is subsequently discovered to have existed in the accounts.

Question

Quizplus · Accepted Answer

A management representation letter is a written statement by the entity's management to the auditor. Its purpose is to provide additional audit evidence, emphasize management's responsibility for the financial statements, and protect the CPA against charges of knowledge in cases where fraud is subsequently discovered. However, it is not used to satisfy the auditor that a certain account balance is fairly stated without performing the necessary auditing procedures.

As Part of an Audit, a CPA Often Requests a Management