(1) It is a written statement by management provided to the auditor to confirm certain matters or to support other audit evidence.
(2) It does not include financial statements, the assertions therein, or supporting books and records.
(3) 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.
As per SA 580 “Written Representations”, if the management does not provide one or more of the requested written representations, the auditor shall:
i. Discuss the matter with management,
ii. Re-evaluate the Integrity of the management and evaluate the effect that this may have on the reliability of representations (oral or written) and audit evidence in general, and
Take appropriate actions, including determining the possible effect on the opinion in the auditor’s report.
The auditor should disclaim an opinion on the financial statements if management does not provide written representations in accordance with SA 705 “Modifications to the Opinion in the Independent Auditor’s Report”.
