AICPA Exam CPA-Auditing Topic 1 Question 29 Discussion

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.