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:

FIFO

First-In, First-Out, an accounting method for managing inventory and financial matters where the oldest inventory items are sold or used first.

Inventory Costing

A method used to assign costs to inventory items and determine the cost of goods sold during a period.

Purchase Order

A document issued by a buyer to a seller, specifying the types of products, quantities, and agreed prices for products or services the seller will provide to the buyer.

Inventory

The total amount of goods and materials held by a company that are ready for sale or in the process of being produced.