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NEW QUESTION: 1
Which of the following statements might be included among additional written client representations
obtained by the auditor?
A. Management acknowledges that there are no material weaknesses in internal control.
B. Compensating balances and other arrangements involving restrictions on cash balances have been
disclosed.
C. Management acknowledges responsibility for illegal actions committed by employees.
D. Sufficient audit evidence has been made available to permit the issuance of an unqualified opinion.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Choice "A" is correct. The purpose of the management representation letter is to confirm management's
oral evidence supplied during the engagement. Specific written representations obtained by the auditor
might include acknowledgment that all compensating balances or other restrictions on cash have been
disclosed.
Choice "B" is incorrect. Management acknowledges responsibility for the fair presentation of the financial
statements, not for illegal actions committed by employees.
Choice "C" is incorrect. The auditor must decide whether there is sufficient audit evidence available to
permit the issuance of an unqualified opinion, and does not request management confirmation of this
decision.
Choice "D" is incorrect. Management is responsible for the design and maintenance of internal control of
the company, but it is the auditor who must determine whether material weaknesses in internal control
exist.

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