Final answer:
The management representation letter is a letter written by management that provides written representations regarding the financial statements and other related matters. It is an important piece of audit evidence, but it is not a substitute for obtaining other audit evidence through different procedures.
Step-by-step explanation:
The management representation letter is a document that is required to be obtained by the auditor as part of an audit engagement. It is a letter written by management of the company being audited, where they provide written representations regarding the financial statements and other related matters.
Option B is the correct answer. The management representation letter is not a substitute for obtaining sufficient, appropriate evidence regarding the financial statements through other audit procedures. It is an important piece of audit evidence, but it is not the sole source of evidence for the auditor.
For example, an auditor may obtain external confirmations from third parties, perform substantive testing, and assess internal controls to gather audit evidence. The management representation letter provides additional assurance, but it cannot replace the need for other audit procedures to gather sufficient, appropriate evidence.