Question: Consider the audit procedure to obtain a representation letter from the client at the end of the audit. The staff accountant on the engagement questions

Consider the audit procedure to obtain a representation letter from the client at the end of the audit. The staff accountant on the engagement questions the necessity for this procedure, saying, "Isn't this procedure silly? I give the client a copy of the representation letter and ask them to type it on the company's letterhead. What good is this letter if I tell the client what to say? Couldn't they just say that they did what I told them to do and didn't really understand what they were signing?"
a. How would you answer this question?
b. How does the representation letter provide important audit evidence to the auditors? Why is it a required audit procedure?

Step by Step Solution

★★★★★

3.25 Rating (157 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a It is the auditors job to go through the representation letter with the cli... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

386-B-A-A-A-N (3758).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

Consider the audit procedure to confirm outstanding balances, terms, conditions, and compliance with covenants with the grantor or trustee of the debt at year-end. a. How does the auditor perform...

Why does the auditor obtain a representation letter from management?

How would you answer Wetlaufers question whether, if Joe Ryan is successful at his job, it makes any difference that he cheats on his wife? Does it alter your opinion of Wetlaufers article to learn...

31. Which of the following statements concerning sample size is true? a. An increase in the tolerable occurrence rate, other factors remaining unchanged, increases sample size. b. The higher the...

es In an audit of financial statements, the auditors gather various types of audit evidence. List seven major types of evidence and provide a procedural example of each. Analytical procedures are...

81. A CPA purchased stock in client Corporation and placed it in a trust as an educational fund for the CPA's minor child. The trust securities were not material to the CPA but were material to the...

Please help me I need answers of this. 1. Which of the following factors most likely would cause a CPA not to accept a new audit engagement? 1 point Management reputation for failing to provide...

Alpine Cupcake Audit Case- Cash Module Question 4: You have concerns about the adequacy of the substantive audit work done by the engagement team. Review in detail the cash confirmation and bank...

1.Which of the following factors most likely would cause a CPA not to accept a new audit engagement?* Management reputation for failing to provide schedules to prior auditors on a timely basis. The...

6. What are the quality control elements of a CA or CPA firm? 1 point Human resources Ethical requirements Acceptance and continuance of a client Leadership responsibilities for quality Monitoring...

Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do companies use different depreciation methods for tax reporting and financial reporting?

Due to ineffective controls while counting its inventory, Walker & Comer, Inc., double-counted $50,000 of inventory at the end of the current year. Before discovering this error, the company's ending...

11. Consider the following data on the personal savings rate from 1980 until 2021 in Canada. What patterns do you notice during and after the last four recessions? What explains these patterns?...

Find out the LCM of 1000! and (1001 1002 1003 1004 1005 1006)? (a) 1001! (b) 1005! (c) 1006! (d) 1000!

How can a CPA make use of the preceding years audit working papers in a recurring audit?

When planning an audit, the auditors should assess the levels of risk and materiality for the engagement. Explain how the auditors judgments about these two factors affect the auditors planned audit...

Morgan, CPA, is approached by a prospective audit client who wants to engage Morgan to perform an audit for the current year. In prior years, this prospective client was audited by another CPA....

Identify relevant cash flows used in evaluating a capital budget project. Why capital budgeting techniques use cash flows instead of profits. Use the example of a restaurant chain opening an...

(17) Electronics and more offers Credit term of 2/7 Net/20 what is effective Annual rate on $ 4500 purchase you Not Jet Adiscount. BAR A) 41.837. B). 38.597. C). 44.99%. D). 37.801

Assignment RCES Question 1 If the beginning balance in Raw Materials Inventory is $5,000, the ending balance is $3,500, and $60,000 was purchased, what is the amount of materials transferred to Work...