A written understanding between the auditor and the client concerning the auditor's responsibility for the discovery of illegal acts is usually set forth in a(n):
A)client representation letter.
B)letter of audit inquiry.
C)management letter.
D)engagement letter.

Question

Quizplus · Accepted Answer

The understanding between the auditor and the client regarding the auditor's responsibility for the discovery of illegal acts is typically documented in the engagement letter. This ensures that both parties are clear on their respective responsibilities and reduces the risk of misunderstandings or disputes down the line. Option A, client representation letter, is a document prepared by the client that confirms certain information to the auditor, but it typically would not cover the auditor's responsibility for detecting illegal acts. Option B, letter of audit inquiry, is a document that the auditor sends to third parties to obtain information to support the audit, and again would not address the auditor's responsibility for detecting illegal acts. Option C, the management letter, is a separate communication that the auditor provides to management, which highlights issues or areas for improvement identified during the audit, but it does not specifically address the auditor's responsibility for detecting illegal acts.

A Written Understanding Between the Auditor and the Client Concerning