"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(an)
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 from a management representation letter, which management provides to the auditor as part of the audit process. The letter contains various representations about the company's financial statements and related matters, including any violations or possible violations of laws or regulations that would require disclosure or recording of a loss contingency. It is the responsibility of management to make these disclosures to the auditor, and if there are no such disclosures, management can provide a representation to that effect in the management representation letter.

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