Question

What is the letter called that is drafted by the auditor and reports observations to management which may help management perform more effectively?

a. The letter of reportable conditions.
b. The management representation letter.
c. The management letter.
d. The contingent events document.

Answer 1

The correct answer is c. The management letter, which provides beneficial observations and recommendations from the auditor to the management team.

Step-by-step explanation:

The letter that is drafted by the auditor and reports observations to management which may help management perform more effectively is known as c. The management letter. This document typically contains the auditor's findings that are not significant enough to be included in the official audit report, but could still be beneficial to management for improving the effectiveness of operations, internal controls, and financial reporting. The management letter may include recommendations for improvements and highlights less significant deficiencies, weaknesses, and areas for enhancement that were identified during the audit.