Page 226 - CA Inter Audit PARAM

CA Ravi Taori

Written Representation - not substitute to audit Old Course -- (P16M/M18R/M19M/M20R/
QNO evidence and Objective of Written Representation SM17/N19R/SM20/SM21/N20E/ N21M)
580.05
Bhaskar CNO- SA580.020/SA580.160
Although written representations provide necessary audit evidence yet they do not provide sufficient
appropriate audit evidence on their own about any of the matters with which they deal. Discuss.
OR
The auditor P of PAR and Co., a firm of Chartered Accountants is conducting audit of Kapor Industries Ltd.
The auditor requests management to provide Banker’s certificate in support of Fixed deposits whereas
management provides only written representation on the matter.
Required Discuss how would you deal as an auditor.
OR
Auditor of AAS Ltd. was unable to confirm the existence and valuation of imported goods lying with the
transporter and accepted a certificate from the management without obtaining other audit evidence.
Comment
OR
Explain clearly objective of the auditor regarding written representation.
OR
Audit evidence is all the information used by the auditor in arriving at the conclusions on which the audit
opinion is based. Written representations are necessary information that the auditor requires in connection
with the audit of the entity’s financial statements. Accordingly, similar to responses to inquiries, written
representations are audit evidence. Explain stating clearly objectives of the auditor regarding written
representation.
Answer ➢ Audit Evidence
Audit evidence is all the information used by the auditor in arriving at the conclusions on which the
audit opinion is based.

➢ Written representations
• Although written representations provide necessary audit evidence, they do not provide
sufficient appropriate audit evidence on their own about any of the matters with which they
deal.
• Furthermore, the fact that management has provided reliable written representations does
not affect the nature or extent of other audit evidence that the auditor obtains about the
fulfillment of management’s responsibilities, or about specific assertions.
• Written representations are necessary information that the auditor requires in connection
with the audit of the entity’s financial statements. Accordingly, similar to responses to inquiries,
written representations are audit evidence.
• Written representations are requested from those responsible for the preparation and
presentation of the financial statements.

➢ The objectives of the auditor regarding written representation (Write Only When Specifically
Asked)

• The objectives of the auditor are:
• To obtain written representations
To obtain written representations from management. Also, that management
believes that it has fulfilled its responsibility for the preparation of the financial
statements and for the completeness of the information provided to the auditor;

• To support other evidence
To support other audit evidence relevant to the financial statements or specific
assertions in the financial statements by means of written representations; and

• To respond appropriately

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