Correct Answer:
A. Is written confirmation from management that supports other audit evidence but cannot replace it
Representations from management are supplementary; they do not replace sufficient appropriate evidence.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
A management representation letter:
Related MCQs
An auditor holding shares in the audited client creates which type of threat?
A.
Self-interest threat
B.
Advocacy threat
C.
Familiarity threat
D.
Intimidation threat
Correct answer is:
A. Self-interest threat
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Standard deviation of returns is a measure of:
A.
Expected return
B.
Liquidity
C.
Systematic risk only
D.
Total risk (variability of returns)
Correct answer is:
D. Total risk (variability of returns)
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Which of the following is an example of a public sector fraud risk indicator?
A.
Payments approved with full documentation
B.
Competitive bidding with several bidders
C.
Payments split into smaller amounts to avoid approval limits
D.
Regular stock verification
Correct answer is:
C. Payments split into smaller amounts to avoid approval limits
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Subsidies are best defined as:
A.
Taxes imposed on producers
B.
Payments by the government to producers or consumers to reduce the price or cost of goods and services
C.
Penalties on consumers
D.
Loans from abroad
Correct answer is:
B. Payments by the government to producers or consumers to reduce the price or cost of goods and services
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A positive externality is:
A.
A benefit received by third parties who did not pay for it, such as from vaccination
B.
A cost imposed on third parties
C.
A tax on producers
D.
A government subsidy
Correct answer is:
A. A benefit received by third parties who did not pay for it, such as from vaccination
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The fixed assets register of a government entity records:
A.
Only cash balances
B.
Only tax receipts
C.
Only salaries
D.
Details of its non-current assets such as land, buildings and vehicles
Correct answer is:
D. Details of its non-current assets such as land, buildings and vehicles
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