ISA 580 (Revised and Redrafted) — Written Representations

ISA 580 (Revised and Redrafted) DEALS with the auditor’s responsibility to OBTAIN Written Representations from Management and where appropriate, those charged with governance in an ‘Audit‘ of Financial Statements.

Table of Contents

ISA 580 (Revised and Redrafted) – Introduction
- 1. Scope of this ISA
- 2. Effective Date
ISA 580 – Objectives
ISA 580 – Definition
- 1. Written Representations
ISA 580 – Requirements
Synopsis

ISA 580 (Revised and Redrafted) – Introduction

1. Scope of this ISA

It deals with the Auditor’s Responsibility to obtain ‘Written Representations’ from Management and where appropriate, those charged with governance in an ‘Audit’ of financial statements.

2. Effective Date

This ISA is EFFECTIVE for audits of financial statements for periods beginning on or after December 15, 2009.

ISA 580 – Objectives

The Objectives of the ‘Auditor’ are:

To obtain Written Representations from Management and where appropriate those charged with governance that have fulfilled their responsibility for the preparation of the Financial Statements;
To support other audit evidence relevant to the Financial Statements or specific assertions; AND
To respond appropriately to written representations provided by Management.

ISA 580 – Definition

1. Written Representations

A ‘Written Statement’ by Management provided to the auditor to CONFIRM certain matters or to support other audit evidence.

ISA 580 – Requirements

1. Management from Whom Written Representation Requested

The ‘Auditor’ shall REQUEST Management to provide a Written Representation that it has fulfilled its responsibility for the preparation of the financial statements.

1.1 Information Provided and Completeness of Transactions

The Auditor Shall REQUEST Management to Provide a Written Representation that:
(a) It has provided the auditor with all relevant information and access as agreed; AND
(b) All transactions have been recorded and are reflected in the Financial Statements.

1.2 Description of Management’s Responsibilities in the Written Representations

Management’s Responsibilities shall be DESCRIBED in the ‘Written Representations’ Required.

2. Other Written Representations

Other ISAs require the ‘Auditor’ to Request Written Representations therefore, the Auditor shall REQUEST such other Written Representations.

3. Date of and Period(s) Covered by Written Representations

The Date of the ‘Written Representations’ shall be AS NEAR as practicable to but NOT after the date of the auditor’s report on the Financial Statements.

4. Form of Written Representations

The ‘Written Representations’ shall be in the form of a ‘RE-PRESENTATION LETTER’ addressed to the auditor.

5. Doubt as to the Reliability of Written Representations and Requested Written Representations Not Provided

5.1 Doubt as to the Reliability of Written Representations

If the ‘Auditor’ has CONCERNS about the Competence, Integrity, Ethical Values or Diligence of Management, the auditor shall DETERMINE the effect on Reliability of representations and audit evidence in general.

If ‘Written Representations’ are INCONSISTENT with other audit evidence, the auditor shall PERFORM audit procedures to attempt to resolve the Matter.

If the ‘Auditor’ concludes that the Written Representations are NOT RELIABLE, the auditor shall TAKE appropriate actions including determining the possible effect on the opinion in accordance with ISA 705 (Revised).

5.2 Requested Written Representations Not Provided

The ‘Auditor’ shall:

DISCUSS the Matter with Management;
RE-EVALUATE the Integrity of Management and EVALUATE the effect on the reliability of representations and audit evidence in general; AND
TAKE appropriate actions INCLUDING possible effect on the opinion.

5.3 Written Representations About Management’s Responsibilities

The Auditor Shall DISCLAIM an Opinion on the Financial Statements in Accordance With ISA 705 (Revised) If:
(a) There is Sufficient *Doubt* about the ‘Integrity of Management‘ such that Written Representations are not Reliable; OR
(b) Management does NOT provide the ‘Written Representations‘.

Synopsis

ISA 580 ‘Written Representations‘ deals with the auditor’s responsibility to obtain Written Representations from Management and where appropriate, those charged with governance in an ‘Audit‘ of Financial Statements.

[500-599] Audit Evidence