As part of an audit, a CPA often requests a representation letter from the entity. Which one of the following is not a valid purpose of such a letter?
A) To provide audit evidence.
B) To emphasize to the entity their responsibility for the fairness of the financial statements.
C) To satisfy himself or herself that a certain account balance is fairly stated when certain customary auditing procedures are not performed.
D) To provide possible protection to the CPA against a charge of knowledge in cases where fraud is subsequently discovered to have existed in the accounts.

Question

Quizplus · Accepted Answer

A representation letter is not intended to replace customary auditing procedures. It is a written document obtained by the auditor from the entity's management and those charged with governance, which confirms certain oral representations made to the auditor during the audit. The other options (A, B, and D) are valid purposes of a representation letter.

As Part of an Audit, a CPA Often Requests a Representation