AUDIT FAILURE Definition

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AUDIT FAILURE is an instance where the auditor said that the financial statements were fairly stated when in fact, they were not.

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UP-FRONT PAYMENT is anything of value, usually money, delivered at the time a contract is signed, e.g. down payment, licensing fees, or closing costs.

MANAGEMENT REPRESENTATION LETTER is a letter addressed to the auditor, signed by the client's chief executive officer and chief financial officer. During an audit, management makes many representations to the auditor. Written representations from management in the letter confirm oral representations given to the auditor, document the continuing appropriateness of such representations, and reduce the possibility of misunderstanding.

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