QQ6

[Dazy]

Hi all F8 FIGHTERS,

I am wondering for the poor response of all the fighters with regard to QQ sessions. It seems that all have forgotten that we have to carry the QQ sessions forward with a new question on every Monday.:nah:

The time is not over yet. I am asking the following question as a QQ6. I am expecting a good response on that from all the members.



Which option is the correct to the following statement?

‘Explain the purpose of a management representation letter.’

Option A
A management representation letter is addressed to the auditors of a company, and is written by the directors of that company at a time towards the end of an audit. The letter contains information from management concerning matters that the auditor may not have been able to obtain sufficient evidence on from other sources, such as estimates for provisions, as well as confirming management’s responsibilities for the financial statements.

Option B
A management representation letter is addressed to the directors of a company, and is written by the auditors of that company at a time towards the end of the audit. The letter contains information on weaknesses in the company’s control systems, identified by the auditor, examples of errors that could occur because of each weakness and recommendations on how to mitigate those weaknesses.

[siddharth]

Option A is the correct option

the purpose of management representations are

1. it is a formal confirmation of responsibilites of the management in preparing financial statements.

2. ISA 580 Management represenatation and other ISAs, compulsorily requires it in specific areas.

3.It can be used as a audit evidence, where auditor cannot obtain sufficient appropriate audit evidence i.e items involving judgements and estimation.

Thanks Dazy for providing this oppurtunity.

[rafia]

option A........

[ssab]

obviously Option A