Page 157 - CA Final PARAM Digital Book.

QNO Date of and period covered by written representation. Old Course – (M19R, M21M)
97.100 TITANIUM CNO--SA580.040/SA580.060 New Course – (SM23)
PRSH & Co is the statutory auditor of Make My Journey Ltd. The company is in the business of tours and
travels. Annual turnover of the company is INR 2000 crores and profits are INR 190 crores. During the
planning meeting of the management and the auditors, it was discussed that the management needs to
provide written representation letter to the auditors for the preparation of the financial statements and
for the completeness of the information provided to the auditor. At the time of closure of the audit, there
has been some confusion about the requirements of the written representation letter. Management
argued that representation need not be written, it can also be verbal which has been provided to the
audit team during the course of their audit. Auditors have completed their documentation and hence in a
way, representation based on verbal discussions with the auditors has also got documented. Auditors
explained that this is mandatory to obtain written representation in accordance with the requirements of
SA 580. However, still some confusion remains regarding the date and period covered by the written
representation. You are required to advise about the date of and period covered by written
representation in view of SA 580.
Answer ➢ Before Audit Report & Near to Signing:
As per SA 580, “Written Representations”, as written representations are necessary audit evidence,

the auditor’s opinion cannot be expressed, and the auditor’s report cannot be dated, before the
date of the written representations. Furthermore, because the auditor is concerned with events
occurring up to the date of the auditor’s report that may require adjustment to or disclosure in the
financial statements, the written representations are dated as near as practicable to, but not after,
the date of the auditor’s report on the financial statements.

➢ Updation of Written Representation
In some circumstances it may be appropriate for the auditor to obtain a written representation
about a specific assertion in the financial statements during the course of the audit. Where this is
the case, it may be necessary to request an updated written representation.

➢ All Periods
The written representations are for all periods referred to in the auditor’s report because
management needs to reaffirm that the written representations it previously made with respect to
the prior periods remain appropriate. The auditor and management may agree to a form of written
representation that updates written representations relating to the prior periods by addressing
whether there are any changes to such written representations and, if so, what they are.

➢ Change of Management
Situations may arise where current management were not present during all periods referred to in
the auditor’s report. Such persons may assert that they are not in a position to provide some or all
of the written representations because they were not in place during the period. This fact, however,
does not diminish such persons’ responsibilities for the financial statements as a whole. Accordingly,
the requirement for the auditor to request from them written representations that cover the whole
of the relevant period(s) still applies.
Author’s Note
A short summary of the above answer is provided below.

First Para Explains — WR should be taken before signing (dating) audit report and as it cover subsequent
events till date of signing audit report it should be close to date of signing

Second Para Explains — WR are generally taken at the end of the year but if any WR is taken during the
year, auditor can ask for updated WR at the end of year if any information has changed

Third Para Explains — If you giving audit report for multiple years, like in prospectus we give report for 5
years then WR should be taken for multiple years

Fourth Para Explains — When we take WR for past years, even if management has changed take it again
from current management because they are overall responsible for financial statements

So it focuses on 4 points

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