Question

Which of the following is not a matter that is typically included in the letter of representation obtained from an audit client?

1) Management's responsibility for the financial statements
2) Management's acknowledgement of its responsibility for the design and implementation of internal control
3) Management's acknowledgement of its responsibility for the selection and application of accounting policies
4) Management's acknowledgement of its responsibility for the prevention and detection of fraud

Answer 1

Management's acknowledgment of its responsibility for the prevention and detection of fraud is not typically included in the letter of representation obtained from an audit client.

Step-by-step explanation:

The not a matter that is typically included in the letter of representation obtained from an audit client is 4) Management's acknowledgement of its responsibility for the prevention and detection of fraud. The other three options are typically included in the letter of representation. However, management's acknowledgement of their responsibility for the prevention and detection of fraud is not a matter that is typically included in the letter of representation. While management is responsible for implementing and maintaining effective internal controls that could prevent and detect fraud, the ultimate responsibility for the detection of fraud lies with the auditors. Therefore, option 4 is not usually part of the letter of representation provided by management.