AICPA Exam CPA-Auditing Topic 3 Question 27 Discussion

Actual exam question for AICPA's CPA-Auditing exam

Question #: 27
Topic #: 3

Which of the following expressions most likely would be included in a management representation letter?

ANo events have occurred subsequent to the balance sheet date that require adjustment to, or disclosure in, the financial statements.

BThere are no significant deficiencies in internal control identified during the prior-year's audit of which those charged with governance are unaware.

CWe do not intend to provide any information that may be construed to constitute a waiver of the attorney-client privilege.

DCertain computer files and other required audit evidence may exist only for a short period of time and only in computer-readable form.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. It is appropriate for the representation letter to contain a statement regarding subsequent events.

Choice 'b' is incorrect. The representation letter typically includes information in four categories: financial statements; completeness; recognition, measurement, and disclosure; and subsequent events.

The communication of significant deficiencies in internal control does not fall within these categories.

Choice 'c' is incorrect. The representation letter typically includes information in four categories: financial statements; completeness; recognition, measurement, and disclosure; and subsequent events.

A waiver of attorney-client privilege does not fall within these categories.

Choice 'd' is incorrect. While this may be an accurate statement, it is not something that would be included in the management representation letter. The representation letter typically includes information in four categories: financial statements; completeness; recognition, measurement, and disclosure; and subsequent events.

by Shawnda at May 04, 2022, 02:15 AM

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