Summary of SA 580
Written Representations
| Meaning | A written statement | ||
| Who obtains the written representation? | Auditor | ||
| From whom | Management or;
TCWG, where applicable |
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| Purpose | To confirm certain matters or;
To support other audit evidence To respond in case of Receipt or Non-receipt of written representations. |
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| Auditor’s duty | |||
| To obtain written Representations | From whom | Appropriate Authority within the management having the responsibility & knowledge of the matter concerned. | |
| Matter on which written representations shall be obtained | v Undertaking by the management that it has fulfilled its responsibility regarding :-
Ø Preparation & presentation of financial statements as per :- · applicable FRF or : · agreed terms of Audit Engagement Letter; Ø Providing of all relevant details to the auditor; Ø Completeness of all transactions recorded & reflected in financial statements; Ø Any other matter, to support any other audit evidences that the auditor thinks appropriate. |
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| Date of and Period(s) Covered by Written Representations | v As near as practicable to, but not after, the date of the auditor’s report on the financial statements.
v The written representations shall be for all financial statements and period(s) referred to in the auditor’s report |
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| Form of Written representations | v Representation Letter addressed to the Auditor | ||
| Whether the Law or regulations prescribed the management to written public statements about its responsibilities | No obligation on the management to include such matters in the representation letter. | ||
| Case When written representation is | Auditor’s duty | ||
| When written representation is Provided by the management | v To Evaluate the reliability of written representation
v In case of any doubt over reliability or written representations are inconsistent with other audit evidence; the auditor shall extend the audit procedures to resolve the doubts/inconsistencies found. v If the auditor concludes that hat the written representations are not reliable, the auditor shall take appropriate actions |
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| When written representation is Not provided by the management | v Discuss the matter with the management;
v Re-Evaluate the integrity of the management;
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| v Where the auditor concludes that :-
Ø There is sufficient doubt about the integrity of Management; or Ø Written representation provided in not reliable; or Ø Management does not provide the written representations |
Disclaimer of opinion shall be given | ||
Point to be Noted:-
- Although written representations provide necessary audit evidence, they do not provide sufficient appropriate audit evidence on their own about any of the matters with which they deal.
- In case of any change of management during the year,such persons may assert that they are not in a position to provide some or all of the written representations because they were not in place during the period. This fact, however, does not diminish such persons’ responsibilities for the financial statements as a whole.
- A written representation that has been modified from that requested by the auditor does not necessarily mean that management did not provide the written representation. However the underlying reason for such modified written representation may affect the opinion in the auditor’s report.