Acca aaa s21 Notes

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September 2021 to June 2022 exams
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Chapter 19
WRITTEN REPRESENTATIONS
1. Introduction
ISA 580 requires auditors to obtain written representation from management and, where appropriate, 
TCWG. Written representations are necessary information that the auditor requires and are audit 
evidence. However, although they provide necessary audit evidence they are not sufficient audit 
evidence on their own on any of the matters with which they deal. Nor do written representations 
affect the nature and extent of other audit evidence that the auditor needs to obtain.
2. Purpose
The objectives of the auditor are to obtain written representations that:
๏
Management /TCWG acknowledge their responsibility for the preparation of the the financial 
statements and have provided all relevant information to the auditor.
๏
All transactions have been recorded.
These representations concerning management's responsibilities are 
required
by ISA 580. In addition 
to other representations that may be 
required
by other ISAs (see section 3 below), an auditor may 
request them to 
support
other audit evidence relevant to one or more specific financial statements 
assertions.
The written representations should be dated as near as possible to, but not after, the date of the 
auditor's report.
In particular, letters of representation are important where it could be difficult for the auditors to 
make sure that certain problems do not exist, or that management does not have certain intentions or 
plans. If you don’t know about a liability it can be difficult to discover. It can also be difficult to 
discover management plans if they have now been discussed at board meetings and recorded in the 
board minutes.
Management representations 
cannot
substitute for other audit evidence or performing audit 
procedures in accordance with ISAs.
Written representation alone cannot provide sufficient appropriate audit evidence for an assertion. If, 
for example, management's intentions provide necessary audit evidence (eg for the classification of 
financial instruments), the auditor must consider:
๏
management's past history in carrying out intentions
๏
the reasons for management's intention
๏
management's ability to pursue its intentions
๏
other information (or lack thereof) which might contradict management's intentions.