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You are the audit manager of a CPA firm and are responsible for the audit of PQR Limited (PQR) for the year. The management of
You are the audit manager of a CPA firm and are responsible for the audit of PQR Limited ("PQR") for the year. The management of PQR has discussed with your assistant the issue of recovering a material trade debt of HK\\$2 million long overdue from a debtor, DEF Company Limited ("DEF"). The management of \\( P Q R \\) has made representation to your assistant that the company has a good business relationship with DEF and they are in discussion with DEF about the long overdue amount of HK\\$2 million. The management is confident that the amount plus overdue interest would be recoverable in full. They have offered your assistant assurance from the board of directors of PQR that this amount is recoverable and agreed to include this assurance specifically in the management representation letter. Relying on representation from DEF's management, your assistant has proposed adding an emphasis of matter on the fundamental uncertainty of the eventual recovery of this overdue amount of HK\\$2 millio
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