1) All of the following statements are included in a management representation letter except:

a) there have been no violations of laws or regulations.

b) no subsequent events have occurred that require adjustment to or disclosure in the financial statements.

c) the auditors fee for completing the audit.

d) the effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to the financial statements.

2) Which of the following procedures would be most likely to assist an auditor in identifying litigation, claims, and assessments?

a) Apply ratio analysis on the current-year's liability accounts.

b) Inspect checks included with the client's cut-off bank statement.

c) Read the file of correspondence from taxing authorities.

d) Obtain a letter of representations from the client's underwriter of securities.