3 Written representation.pdf

Written representations ISA 580 – Written representations ? ISA 580 requires the auditor to request management to provide written representations as follows: ? That it has fulfilled its responsibilities for the preparation of the financial statements ? A variety of ISA-specific issues require disclosure (such as fraud, laws regulations, estimates, going concern, related parties and subsequent events) ? The appropriate use of accounting policies as well as a number of specific disclosures (such as plans that might affect asset values and details of any contingent liabilities). ? The auditor should obtain written representations from management on matters material to the financial statements when other sufficient appropriate audit evidence cannot reasonably be expected to exist. ? The representations should relate to matters where they are critical to obtaining sufficient appropriate audit evidence. Representations cannot be a substitute for other audit evidence that auditors expect to be available. ISA 580 – Written representations If the client refuses to sign a)Auditor should write letter setting out his understanding and ask for management confirmation. b)If management does not reply, auditor should follow up to ascertain that his understanding is correct. c)If management refuses to provide a representation that the auditor considers necessary, this constitutes a scope limitation and the auditor should express a qualified opinion or disclaimer of opinion. ISA 580 – Written representations Thanks for staying with us. You have finished this task. You’re a Champion! Overall review of the financial statements Dec 2013 Q2 (c) Auditors are required to perform an overall review of the financial statements before they provide their audit opinion. Required: Explain THREE procedures an auditor should perform in conducting their overall review of the financial statements. (3 marks) – Reviewing the financial statements to ensure compliance with accounting