Final answer:
The incorrect statement is the fourth one, because the management representation letter is meant to confirm management's, not the auditor's representations made during the review engagement.
Step-by-step explanation:
CPA Hernandez is considering whether to accept a review engagement from a small private company that offers counseling services to high school students who are applying to colleges. To determine which statement is incorrect, we need to review the conditions related to review engagements for CPAs.
The conditions that CPA Hernandez must meet are as follows:
- The financial reporting framework selected by management must be acceptable in the circumstances.
- Hernandez is required to be independent.
- Hernandez must obtain an agreement from management that it acknowledges its responsibility for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework.
The incorrect statement is the fourth one, which says: "Management must agree to provide a representation letter at the conclusion of the review engagement that confirms Hernandez's representations made during the review." In fact, it is not the auditor's representations that are confirmed in the management representation letter, but the management's representations. The letter is meant to confirm statements and disclosures made by management to the auditor during the course of the review engagement.