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1) The date of the management representation letter received from the client should coincide with which of the following?A) Date of latest subsequent event disclosed in the notes to the financial statementsB) Date of the auditor's reportC) Balance sheet dateD) Engagement agreementAnswer: BTerms: Management representation letterDiff: EasyObjective: LO 24-5AACSB: Reflective thinking skills28
2) Which of the following procedures and methods are important in assessing a company's ability to continue as a going concern?Evaluation of management's plans toavoid bankruptcy.YesYesEvaluation of management's plans toavoid bankruptcy.NoNoEvaluation of management's plans toavoid bankruptcy.YesNo3) The letter of representation obtained from an audit client should be:29
4) When should auditors generally assess a client's ability to continue as a going concern?5) Which of the following would the auditor expect to find in the client's management representation letter?A) Management's recommendations for internal control effectiveness improvementsB) Management's plans for improving product qualityC) Management's compliance with contractual arrangements that impact the financial statementsD) Management's goals for improving earnings per shareAnswer: CTerms: Management representation letterDiff: ModerateObjective: LO 24-5AACSB: Reflective thinking skills