The Management Letter Is Used

question 49

Multiple Choice

The management letter is used:

• A)to allow management to document, in writing, oral representations to the auditor.
• B)to confirm the terms of the audit engagement.
• C)to list all reportable conditions with respect to internal controls.
• D)to make recommendations to the entity based on observations made during the audit.

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Definitions:

Freight-In

Costs associated with bringing inventory to a business location, typically included in the inventory cost on the balance sheet.

F.O.B. Shipping Point

A shipping term indicating that a buyer is responsible for the goods, including the risk of loss and transportation cost, from the time they leave the seller's premises.

Invoice Approval Form

A document used to approve invoices for payment, ensuring the goods or services billed have been received and are satisfactory.

Perpetual Inventory System

An inventory accounting system that records goods and materials purchased and sold in real-time through the use of computerized point-of-sale systems and enterprise asset management software.