A Management Representation Letter Is a Written Statement from a Non-

question 4

Multiple Choice

A management representation letter is a written statement from a non- independent source and therefore:

• A) can be regarded as sufficient evidence only if the auditor finds a strong internal control system.
• B) needs to be confirmed by an outside independent source such as a financial institution or law firm.
• C) can be regarded as sufficient evidence if the high- level corporate officials who sign it are trustworthy.
• D) cannot be regarded as sufficient evidence.

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Definitions:

Fiduciaries

Individuals or organizations that are entrusted to manage assets or wealth on behalf of another party and are required to act in the best interests of the beneficiary.

Duty of Care

The legal obligation to ensure the safety or well-being of others by taking reasonable precautions or actions to avoid acts of negligence.

Duty of Diligence

The obligation to perform work with careful attention, effort, and thoroughness, particularly in a professional or legal context.