Chapter 12 - Written representations Flashcards
Define management
It is the person(s) with executive responsibility for the conduct of the entity’s operations. For some entities in some jurisdictions, management includes some or all of those charged with governance, for example, executive members of a governance board, or an owner-manager.
Are written representations required for general matters?
Yes
What elements does ISA 580 require auditors to confirm in writing?
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
When are the written representations dated?
The written representations are dated as near as possible, but not after, the date of the auditor’s report on the financial statements.
Can written evidence be used instead of other (better) evidence which the auditors expect to exist?
No
Written representations cannot be used instead of other (better) evidence which the auditors expect to exist.
What eight matters may other representations include?
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
