When to and from whom to seek the written representation ? Is written representation full proof tool for auditors report ? What if management disagrees to provide you representation ? What consequences can occur and what effort shall be taken to obtain sound information?

1. SA 580
WRITTEN REPRESENTATIONS
Prepared and presented by:
Dipendra Prasad Poudel
mailfordipendra@gmail.com

2. Scope and Effective Date of this SA
SCOPE
• Deals with auditors Responsibility to obtain written
representation from management and, where appropriate,
those charged with governance
EFFECTIVE DATE
• Effective for audits of financial statement beginning on or
after 1st April 2009

3. Written Representations- A tool for Audit
Evidence
• Written Representations are necessary information that
the auditor requires in connection with the audit of entity’s
financial statements
WRITTEN REPRESENTATION PROVIDE AUDIT EVIDIENCE, THEY
DONOT PROVIDE “SUFFICIENT APPROPIATE AUDIT EVIDIENCE”
(SAAE)
• If management modifies or doesn't provide the
requested written representations, it may alert the auditor
to the possibility that one or more significant issues may
exist.

4. Reliability on Written Representation
• The fact, management has provided reasonable 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.

5. Whom shall we ask for written
representations?
• Representations are requested from those responsible
for the preparation and presentation of the financial
statements.
• So in many cases Management is responsible however in
some cases Those Charged With Governance (TCWG)
are responsible party.
• In some cases management may decide to make
enquiries of others who participate in preparing and
presenting financial statements and assertions therein.
• These includes the specialized individual like actuary, staff
engineers, Internal counsels etc

6. Written Representation about
managements responsibilities
• The auditor shall request management to provide written
representation
• It has fulfilled its responsibility for the preparation of financial
statement
• Financial statements are in accordance with Financial Reporting
Framework including where relevant their fair presentations.
• Written representation from management regarding
information and completeness of transaction
• It has provided with all the related information and access as
agreed in the terms of audit engagement, and
• All transaction has been recorded and reflected in financial
statements

7. Date of and Period(S) covered by written
representation
• The date of written representation shall be as near as
practicable to,
• BUT NOT AFTER, the date of auditors report on the
financial statements.
• The written representation shall befor all financial statements and
period(s)referred to in the auditor’s report.

8. Form of written representation
• The written representation shall be in the form of
representation letter addressed to the auditor.
• If law orregulation requires managementto makewritten public statements
about its responsibilities, and the auditor determines that
such statement provides some or all the representation
required for financial statements or information regarding
complete transactions, the relevant matters covered by
such statements need notbe included in representation letter.

9. Doubt as to reliability of Written Representations
• If 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
representation and audit evidence in general.
• If representations are inconsistent with other audit evidence, the auditor
shall perform audit procedures to attempt to resolve the
matter.

10. What if matter remains unresolved ???
• If the matter remains unresolved and the auditor
considers representation are not reliable,
• the auditor shall take appropriate actions, including determining the possible
effect on the opinion in the auditors report in accordanceto SA705

11. What if representations are not provided ?
• If the management doesn’t provide the written
representation then ;
a) Discuss the matter with management
b) Re-evaluate the integrity of management and evaluate
the effect that this may have on the reliability of
representation and audit evidence in general;
c) Take appropriate actions, including determining the
possible effect on the opinion in the auditors report in
accordance with SA 705

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