S&H Associates Has Just Performed an Audit of Bob's Bikes

question 55

Multiple Choice

S&H Associates has just performed an audit of Bob's Bikes. S&H was unable to obtain a written representation from management about internal control. Which of the following is true?

• A)S&H must still assume that management has assessed the effectiveness of internal control.
• B)Depending on other factors in the audit, S&H can still issue an unqualified opinion.
• C)S&H should consider this situation a limitation on the scope of the audit.
• D)Management does not need to give S&H a letter if it has disclosed all known internal control deficiencies.

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Definitions:

Transparency

In finance, it refers to the extent to which investors have ready access to required financial information about a company, market, or security.

Investment Strategy

A plan designed to guide an investor's selection of an investment portfolio, typically based on goals, risk tolerance, and future needs for capital.

Liquidity

The ease with which an asset or security can be converted into cash without significantly affecting its market price.

Limited Liability Partnerships

A business structure that allows partners to have limited liabilities, which means they are not personally liable for the debts of the business.