"There are no violations or possible violations of laws or regulations whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency." The foregoing passage most likely is from a(n):
A)entity engagement letter.
B)report on compliance with laws and regulations.
C)management representation letter.
D)attestation report on internal controls.

Question

Quizplus · Accepted Answer

The passage is likely a statement included in a management representation letter. Management representation letters are typically obtained by auditors from management as part of the audit process, and they include representations related to financial statement assertions, compliance with laws and regulations, and other matters. The passage suggests that management is representing that there are no violations or possible violations of laws or regulations that need to be disclosed or recorded as a loss contingency in the financial statements.

"There Are No Violations or Possible Violations of Laws or Regulations