Chapter 12: Written representations

Question 1

What does the management representation contain?

Answer 1

• explanation or answers given to assurance

- oral or written

Question 2

What is the purpose of the written representations required by the ISA 580?

Answer 2

• written of oral agreement is reliable

- can be used in all assurance work

Question 3

What is the format of the written representation?

Answer 3

• draft mgmt letter
• director sign
• evidence return before audit signed (letter date close to audit report)

Question 4

What does the ISA 580 require auditor in the written representation in general?

Answer 4

• confirm if mgmt has fulfilled responsibility for FStat
• all info provided
• all transaction recorded

Question 5

What does the ISA 580 in require auditor in the written representation for specifc?

Answer 5

• sum of of unadjusted misstmt is immaterial (conjunction with ISA 450)
• support other audit evidence

Question 6

What other matters are subject to the written representation?

Answer 6

• if accounting policies are appropriate
• if right reporting complied for e.g. carrying value of assets
• deficiencies in internal control of which mgmt aware
• support mgmt judgement

Question 7

When is the written representation not so reliable?

Answer 7

• about competence, integrity of mgmt
• inconsistent letter with other audit papers
  (if contradicted, auditor investigate of impact on assessment)