QUESTION ONE

a What are the implications if management refuses to sign a management representation letter? If management signs a management representation letter, is that a good indication that all of managements statements described in the letter are actually true? ( 5 marks)

b List five factors that may indicate that a client may not remain a going concern. For each, indicate the degree of subjectivity and judgment that would be required in determining if the indicator would, in fact, result in the company going bankrupt. (10 marks)