Refer to the example of a written management representation letter illustrated in Exhibit 15€“5.

Required:
a. What are the assumptions about the audit engagement in this management representation letter?
b. Which of the representations in the example letter need to be provided regardless of their materiality?
c. If an event subsequent to the date of the balance sheet has been disclosed in the financial statements, what modification would be made to the example letter?
d. If management has received a communication regarding an allegation of fraud or suspected fraud, what modification would be made to the exampleletter?

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EXHIBIT 15-5 Auditing Procedures for the Period Subsequent to the Balance Sheet Date A. Procedures performed in connection with other audit programs Use a cutoff bank statement to Examine cheques paid after year-end that are, or should have been, listed on the bank reconciliation 2. Vouch collections on accounts receivable in the month following year-end for evidence of existence and 3. Trace cash disbursements of the month after year-end to accounts payable for evidence of any 4. Vouch write downs of fixed assets after year-end evidence that such valuation problems existed at the 5. Vouch sales of investment securities, writedowns, or write offs in the months after the audit date for 6. Vouch and trace sales transactions in the month after year-end for evidence of proper sales and cost b. Examine bank posting of deposits in transit listed on the bank reconciliation. collectability of the year-end balances liabilities unrecorded at year-end. year-end date evidence of valuation at the year-end date of sales cutoff B. Additional auditing procedures for subsequent events 1. Obtain the latest available interim financial statements and: a. Compare them with the financial statements being reported on, and make any other comparisons considered appropriate in the circumstances. Investigate any unusual fluctuations. b. Enquire of officers and other executives having responsibility for financial and accounting matters about whether the interim statements have been prepared on the same basis as that used for the statements under examination. Assess impact of any changes on comparability. Scan the accounting records for the subsequent event period (such as general ledger, general journal entries, sales journal, purchases journal, cash receipts journal, and cash disbursements journal), and estigate any unusual transactions or entries 3. Enquire of and discuss with officers and other executives having responsibility for financial and accounting matters (limited where appropriate to major locations) a. Whether any substantial contingent liabilities or commitments existed at the date of the balance sheet being reported on or at the date of enquiry. b. Whether there was any significant change in the share capital, long-term debt, or working capital to the date of enquiry The current status of items in the financial statements being reported on that were accounted for on the basis of tentative, preliminary, or inconclusive data. d. Whether any unusual adjustments have been made during the period from the balance sheet date to the date of enquiry Read the available minutes of meetings of shareholders, directors, and appropriate committees; enquire about matters dealt with at meetings for which minutes are not available 5. Request that the client send a letter to legal counsel enquiring about outstanding claims, possible claims, and management's evaluation, with the reply to be sent directly to the auditor Obtain written representations, dated as of the date of the auditor's report, from appropriate officials, generally the chief executive officer and chief financial officer, about whether any events occurred subsequent to the date of the financial statements that, in the officer's opinion, would require adjustment or disclosure in these statements 7. Make such additional enquiries or perform such procedures as considered necessary and appropriate to dispose of questions that arise in carrying out the foregoing procedures, enquiries, and discussions