[Anonymous]

Reading through notes and taking a few questions and I come on an issue regarding the attorney representation and the management rep letter.

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

A. An assessment of the risk factors concerning the misappropriation of assets.

B. An evaluation of the litigation that has been filed against the entity.

C. A confirmation that the entity has complied with contractual agreements.

D. A statement taht all material internal control weaknesses have been corrected.

Answer is C.

My problem is that the attorney letter is to corroborate the litigation and contingent liabilities from management. When is this done if not in the management rep letter? I guess the date of the management rep letter is that of the audit report; so it must be done prior?

Can anyone add a bit of light to this?

[rjcpa]

They are two different letters. Rep letter is from mgmt. to auditor explaining different things that the auditors want the mgmt. to testify to. In the question the auditors want mgmt. to specifically say that they have complied with contracts and laws. That way it gives the auditors an out if sued to say that mgmt. lied to them. This is done around the audit report date.

The lawyer letter is from the lawyers to the auditors explaining liabilities that the lawyers are aware of and any potential liabilities that may arise. This is also done around the report date.

FAR - 10/3/12 - 86
BEC - 11/27/12 - 70 1/14/13 - 81
AUD - 4/4/13 - 87
REG - 7/8/13 - 80

[Author]

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