[Anonymous]

I’m currently studying for AUD and ran into a few SIMS on Ninja MCQ that are confusing. Question 38 is an example of one. It asks for the specific paragraph but none of the paragraphs are labeled. I just put in the section and got it wrong. Is the real test like this as well? Below is the section i’m taking about. The answer is 90.A148 and is the paragraph starting with “this representation letter”

90.A146

Exhibit B – Illustrative Representation Letter:

The following illustrative letter is intended as an illustration that may be used to comply with the requirements of section 90. The representation letter will vary according to the individual requirements and circumstances.

It is assumed in this illustration that the applicable financial reporting framework is accounting principles generally accepted in the United States of America, that no conditions or events exist that might be indicative of the entity’s inability to continue as a going concern, and that no exceptions exist to the requested written representations. If circumstances differ from these assumptions, the representations would need to be modified to reflect the actual circumstances.

(Entity Letterhead)
(To Accountant)
(Date)

“This representation letter is provided in connection with your review of the financial statements of ABC Company, which comprise the balance sheets as of December 31, 20X2, and 20X1, and the related statements of income, changes in stockholders’ equity and cash flows for the years then ended, and the related notes to the financial statements, for the purpose of obtaining limited assurance as a basis for reporting whether you are aware of any material modifications that should be made to the financial statements in order for the statements to be in accordance with accounting principles generally accepted in the United States of America.

“Certain representations in this letter are described as being limited to matters that are material. Items are considered material regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.

“We represent that [to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves] [as of (date of accountant’s review report)]:…”