Chapter 12 - Written representations

Question 1

What is written representation with regards to audit

Answer 1

A written representation is a written statement from management to an auditor that confirms or supports other audit evidence

Question 2

What elements does ISA 580 require auditors to confirm in writing within mangement representations?

Answer 2

Management has:

• fulfilled its responsibility for the preparation of the financial statements in accordance with the applicable financial reporting framework
• provided the auditor with all relevant information and access as agreed in the terms of the audit engagement
• recorded and reflected all transactions in the financial statements

Question 3

When are the written representations dated?

Answer 3

The written representations are dated as near as possible, but not after, the date of the auditor’s report on the financial statements.

Question 4

Can written evidence be used instead of other (better) evidence which the auditors expect to exist?

Answer 4

No

Written representations cannot be used instead of other (better) evidence which the auditors expect to exist.

Question 5

What eight matters may other representations include?

Answer 5

Whether the selection and application of accounting policies are appropriate

Plans or intentions that may affect the carrying value or classification of assets and liabilities

Liabilities, both actual and contingent

Title to assets, the liens on assets, and assets pledged as collateral

Aspects of laws, regulations and contractual agreements that may affect the financial statements, including non-compliance

Whether all deficiencies in internal control of which management is aware have been communicated to auditors

Specific written representations required by other ISAs

Support for management’s judgement or intent in relation to a specific assertion