Written Representations

Question 1

What are management representations?

Answer 1

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

Question 2

What are management representations a form of?

Answer 2

Evidence

Question 3

What formats can management representations be?

Answer 3

Oral or written

Question 4

Purpose of written representations

Answer 4

Written confirmation of oral representations avoid confusion and disagreement

Question 5

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

Answer 5

All

Question 6

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

Answer 6

Yes

Question 7

Format of written representations. Auditor will usually:

Answer 7

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

Question 8

When should written representations be dated?

Answer 8

As near as possible before the date of the audit report

Question 9

Contents of management representation letter

Answer 9

1. General matters
2. Other matters

Question 10

Management representation letter: General matters

Answer 10

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

Question 11

Management representation letter: Other matters

Answer 11

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

Question 12

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

Answer 12

No

Question 13

Areas of doubt to reliability of management representations

Answer 13

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