The Auditor Relies on the client Representation Letter To

question 56

Multiple Choice

The auditor relies on the client representation letter to:

• A) confirm written representations given to the auditor.
• B) document the continuing materiality of client representations.
• C) guarantee the absence of management fraud.
• D) reduce the possibility of misunderstanding concerning management's representations.
• E) replace more costly evidence gathering procedures.

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Definitions:

Declaration Date

The date on which a company's board of directors announces its next dividend payment, including the amount to be paid and the record and payment dates.

Ex-dividend Date

The specific date on which a stock is traded without its dividend rights, meaning any subsequent buyer will not receive the next dividend payment.

Stock Transfer Books

Records maintained by a company documenting the ownership and transfer of its stock, used to ensure legal ownership and voting rights.

Stock Dividend

Essentially a stock split in which the number of new shares issued is less formal and usually smaller.