Because of the pervasive effects of laws and regulations on the financial statements of governmental units, an auditor should obtain written management representations acknowledging that management has:
a.Employed internal auditors who can report their findings, opinions, and conclusions objectively without fear of political repercussion.
b.Implemented internal controls designed to detect all illegal acts.
c.Responsibility for understanding and complying with compliance requirements.
d.Expressed both positive and negative assurance to the auditor that the entity complied with all laws and regulations.
Answer:C
Choice "C" is correct. The auditor should obtain written representation that management has responsibility for understanding and complying with compliance requirements.
Choice "b" is incorrect. Management need not acknowledge that it has implemented internal control activities to detect all illegal acts.
Choice "d" is incorrect. Management should state that it is responsible for compliance with all laws and regulations.
Choice "a" is incorrect. Management need not employ internal auditors.