Which of the Following Is Not a Purpose of the Management

question 91

Multiple Choice

Which of the following is not a purpose of the management representation letter?

• A)It reminds management of its responsibility for the financial statements.
• B)It confirms oral responses obtained by the auditor earlier in the audit and the continuing appropriateness of those responses.
• C)It decreases the possibility of misunderstanding concerning the matters that are the subject of the representations.
• D)It implies that the auditor is responsible for the design of the internal controls.

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Definitions:

Closed-end Funds

Type of investment fund with a fixed number of shares that trade on a stock exchange, unlike open-end funds that continuously issue new shares or redeem existing shares.

Behavioral Finance

Models of financial markets that emphasize implications of psychological factors affecting investor behavior.

Conventional Financial Theory

A framework that includes principles and models for understanding financial markets, portfolio management, and investment decision-making.

Utility-maximizing Investors

Investors who strive to achieve the highest possible level of satisfaction or utility from their investment choices, based on their preferences and risk tolerance.