Written Representations Flashcards

1
Q

What are management representations?

A

Explanations or answers given to the assurance provider during the course of an engagement

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2
Q

What are management representations a form of?

A

Evidence

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3
Q

What formats can management representations be?

A

Oral or written

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4
Q

Purpose of written representations

A

Written confirmation of oral representations avoid confusion and disagreement

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5
Q

What type of assurance engagement may management representations be used in?

A

All

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6
Q

Are written representations required from management according to ISA (UK) 580?

A

Yes

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7
Q

Format of written representations. Auditor will usually:

A
  1. Prepare draft
  2. Ask directed to sign
  3. Require its return as evidence before audit report signed
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8
Q

When should written representations be dated?

A

As near as possible before the date of the audit report

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9
Q

Contents of management representation letter

A
  1. General matters
  2. Other matters
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10
Q

Management representation letter: General matters

A
  1. Management has fulfilled its responsibilities for FS preparation in accordance with relevant financial reporting framework
  2. All relevant info has been provided to auditor
  3. All transactions have been recorded and reflected in financial statements
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11
Q

Management representation letter: Other matters

A

If other ISAs require them
E.g. ISA450 all uncorrected misstatements and sum immaterial

The auditor decides they are

Whether accounting policies appropriate

Applicable reporting framework complied with in respect of items such as intentions that may affect carrying value of assets

Deficiencies in internal control management knows about all reported

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

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12
Q

Can written representations be used instead of other evidence which the auditor expects to exist?

A

No

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13
Q

Areas of doubt to reliability of management representations

A
  1. Auditor concerned about management’s competence, integrity, diligence
  2. Inconsistent with other audit evidence
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