During the audit of the financial statements of Blackheath Manufacturing Ltd (BM), the managing director, Mr S. Hill, and the auditor, Mr P. Wales, reviewed matters that were supposed to be included in a written management representation letter. Mr Hill prepared the following management representation letter after their discussion.

Required

(a) What is the purpose of a management representation letter?

(b) Identify the other matters that Mr Hill’s representation letter should specifically address.

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To: Mr P.Wales, FCA In connection with your audit of the annual financial statements of Blackheath Manufacturing Ltd. for the year ended 30 June 20X1, for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the financial position and results of operations in conformity with generally accepted accounting principles, we confirm, to the best of our knowledge and belief, the following represen- tations made to you during the audit. There were no: " plans or intentions that may materially affect the carrying value or classification of assets and liabilities; communications from regulatory agencies concerning non-compliance with, or deficiencies in, financial reporting practices; agreements to repurchase assets previously sold; other legal claims other than those already disclosed; capital stock repurchase options or agreements, or capital stock reserved for options, warrants, conversions and other requirements; compensating balance or other arrangements involving restrictions on cash bal- ances. S. Hill Mr S. Hill Managing Director Blackheath Manufacturing Ltd. 27 August 20X1