An Audit Engagement Letter Sets Forth the Auditor's Responsibility for Confirming

question 49

Short Answer

An audit engagement letter sets forth the auditor's responsibility for confirming its responsibility to provide written communications to the client company for each of the following items except: $\begin{array}{|l|l|l|}\hline&\text { Communication }\\&\text { provided to: }&\text { Subject matter: } \\\hline \text { (a) } & \begin{array}{l}\text { Management and }\\\text { the shareholders }\end{array} & \begin{array}{l}\text { All internal control deficiencies identified during }\\\text { the audit and not previously communicated. }\end{array} \\\hline \text { (b) } & \text { Shareholders } & \begin{array}{l}\text { All adjustments required to correct the financial } \\\text { statements }\end{array} \\\hline \text { (c) } & \begin{array}{l}\text { Management and } \\\text { the audit committee }\end{array} & \begin{array}{l}\text { All significant deficiencies and material } \\\text { weaknesses in ICFR identified during the audit. }\end{array} \\\hline \text { (d) } & \text { Board of directors } & \begin{array}{l}\text { The auditor's overall conclusions concerning the } \\\text { effectiveness of financial oversight and ICFR. }\end{array} \\\hline\end{array}$

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Definitions:

International Joint Venture

A business arrangement in which two or more parties from different countries form a partnership to share resources, risks, and rewards in pursuing a specific business venture.

Abnormal Return

The difference between the actual return of a security and the expected return based on risk and market performance.

Fundamental Analysts

Professionals who evaluate securities by measuring the intrinsic value of a stock, company, or market, based on financial and economic factors.

Dividend Prospects

The potential for future dividend payments from investments, often assessed to evaluate the attractiveness of stocks.