Written Representations Flashcards
What are management representations?
Explanations or answers given to the assurance provider during the course of an engagement
What are management representations a form of?
Evidence
What formats can management representations be?
Oral or written
Purpose of written representations
Written confirmation of oral representations avoid confusion and disagreement
What type of assurance engagement may management representations be used in?
All
Are written representations required from management according to ISA (UK) 580?
Yes
Format of written representations. Auditor will usually:
- Prepare draft
- Ask directed to sign
- Require its return as evidence before audit report signed
When should written representations be dated?
As near as possible before the date of the audit report
Contents of management representation letter
- General matters
- Other matters
Management representation letter: General matters
- Management has fulfilled its responsibilities for FS preparation in accordance with relevant financial reporting framework
- All relevant info has been provided to auditor
- All transactions have been recorded and reflected in financial statements
Management representation letter: Other matters
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
Can written representations be used instead of other evidence which the auditor expects to exist?
No
Areas of doubt to reliability of management representations
- Auditor concerned about management’s competence, integrity, diligence
- Inconsistent with other audit evidence
