Question

While there is no professional requirement to do so on audit engagements, CPAs frequently issue a formal ""management"" letter to clients. The primary purpose of this letter is to provide

A) evidence indicating whether the auditor is reasonably certain that internal accounting control is operating as prescribed.
B) a permanent record of the internal accounting control work performed by the auditor during the course of the engagement.
C) the client with the CPA's recommendations for improving any part of the client's business.
D) a summary of the auditor's observations that resulted from the auditor's special study of internal control.

Answer 1

The primary purpose of a CPA-issued management letter is to provide clients with recommendations for business improvements following an audit.Hence, the correct answer is option C.

Step-by-step explanation:

The primary purpose of a management letter, which CPAs often issue to clients after an audit engagement, is C) to provide the client with the CPA's recommendations for improving any part of the client's business. Although not required, this formal communication serves as a means for auditors to convey observations and suggestions that may aid in enhancing the company's operations, systems, and controls. It is useful for identifying small and large areas for improvement beyond the traditional scope of financial statement accuracy.