Chapter 12

Question 1

what is meant by management representations?

Answer 1

are explanations or answers given to the assurance provider during the cause of the engagement
- form of evidence can be written or oral

Question 2

what is the purpose of written representations?

Answer 2

• avoid confusions and disagreement i.e. more reliable
• ISA (UK) 580 require auditor to obtain written representations form management

Question 3

in terms of written representations what will the auditor usually do?

Answer 3

• prepare a draft management representation letter
• ask directors to sign it
• management return as evidence before audit report is signed off

Question 4

what must the auditor get written representations on (general matters)?

Answer 4

• confirmation that management have fulfilled responsibilities for the preparation of financial statements
• confirmation all relevant info has been provided to auditor
• confirmation all transactions have been recorded

Question 5

what must the auditor get written representations on (other matters)?

Answer 5

• other ISA’s require a list of uncorrected misstatements
• written representations to support other audit evidence

Question 6

what is more reliable written or oral represenatations?

Answer 6

written

Question 7

When might there be doubts over management representations?

Answer 7

• auditor has concerns about the competence, integrity or diligence of management
• representations are inconsistent with other audit evidence