Page 229 - CA Inter Audit PARAM

CA Ravi Taori
OR
Written representations are to be provided by the management to the auditor when requested. Comment.
Answer WR for Preparation of the Financial Statements
The auditor shall request management to provide a written representation that it has fulfilled its
responsibility for the preparation of the financial statements in accordance with the applicable financial
reporting framework, including where relevant their fair presentation, as set out in the terms of the audit
engagement.

Audit evidence obtained during the audit that management has fulfilled the responsibilities is not sufficient
without obtaining confirmation from management about the same. This is because the auditor is not able to
judge solely on other audit evidence.

For example, the auditor could not conclude that management has provided the auditor with all relevant
information agreed in the terms of the audit engagement without asking it whether, and receiving
confirmation that, such information has been provided.

WR for Information Provided and Completeness of Transactions
The auditor shall request management to provide a written representation that:
It has provided the auditor with all relevant information and access as agreed in the terms of the audit
engagement, and

All transactions have been recorded and are reflected in the financial statements.

Management Refusal
If management does not provide one or more of the requested written representations, the auditor shall:
• Discuss the matter with management;
• Re-evaluate the integrity of management and evaluate the effect that this may have on the reliability
of representations and audit evidence in general; and
• Take appropriate actions, including determining the possible effect on the opinion in the auditor's
report in accordance with SA 705

Case discussion & Conclusion
The view of management is not proper. This is because the auditor is not able to judge solely on other audit
evidence whether management has prepared and presented the financial statements and provided
information to the auditor on the basis of the agreed acknowledgement and understanding of its
responsibilities.

In case of refusal of management to provide such a confirmation, it may lead to disclaimer of opinion by the
auditor.

QNO-- Doubt Over Reliability of WR New Course – (J25M)
580.20 Bhaskar CNO – SA580.140

"During the audit of a company, CA Jack obtained written representations from management regarding all
known instances of non-compliance with laws and regulations that should be considered in the preparation
of the financial statements. However, during the audit, he observed that the information provided in this
regard was incomplete, and the audit evidence indicating such non-compliance contradicted the written
representations, casting doubt on their reliability. How should CA Jack proceed in this situation?"

Answer In the given situation, company’s management has not provided complete information regarding instances of
non-compliance with laws & regulations. If the auditor has concerns about the competence, integrity, ethical
values or diligence of management, or about its commitment to or enforcement of these, the auditor shall
determine the effect that such concerns may have on the reliability of representations and audit evidence in
general.

The above situation highlights that auditor has obtained audit evidence relating to non-compliance with laws
which is inconsistent with written representations in this respect casting a doubt about reliability of written
representations.

As per SA 580, “Written Representation”, if written representations are inconsistent with other audit
evidence, the auditor shall perform audit procedures to attempt to resolve the matter. If the matter remains
unresolved, the auditor shall reconsider the assessment of the competence, integrity, ethical values or
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