Define a Management Representation Letter

question 103

Multiple Choice

Define a management representation letter.

• A)A letter from management to the auditor acknowledging management's responsibility for the preparation of the financial statements and details of any verbal representations made by management during the course of the audit.
• B)A written statement by management provided to the auditor to confirm certain matters or to support other audit evidence.
• C)A letter from auditor informing management about concerns.
• D)A written statement containing details of any verbal representations made by management during the course of the audit.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock where dividends accrue and must be paid out before dividends can be distributed to common stockholders.

Par Common Stock

The nominal or face value assigned to a share of common stock, which has relevance in corporate accounting.

Par Value

A nominal value assigned to a stock or bond, representing its face value rather than its market value.

Stock Split

This action increases the number of shares of a corporation by issuing more shares to current shareholders, which typically results in a decrease in the per-share price, making the stock more accessible to a wider range of investors.