## SA 580 – Content of Written Representations

### Category A: WIR about Management Responsibilities for FS

The auditor asks management to confirm (in writing) their responsibilities for:

Preparation and fair presentation of FS (as agreed in the engagement letter)
Providing complete information to the auditor

> Management may need to consult specialists involved in FS preparation — e.g., actuaries, staff engineers — before signing the WIR.

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### Category B: WIR about Completeness of Information Provided

Management confirms that:

All relevant information has been provided to the auditor
All transactions have been recorded and reflected in the FS

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### When is it Necessary to Restate / Re-obtain WIR?

WIR about management responsibilities may need to be re-obtained when:

1. Those who signed the audit engagement no longer have relevant responsibilities (change in personnel)

2. Change in circumstances

3. Misunderstanding of responsibilities

4. Terms of engagement letter were prepared in a prior year and may be outdated

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### Category C: Other Written Representations

These are supplemental to the main WIR and may include representations about:

Area	Details
Accounting Policies	Whether selection and application of accounting policies is appropriate
Recognition/Disclosure	Whether matters have been recognized, presented, and disclosed appropriately
Plans & Intentions	Plans or intentions that may affect carrying value or classification of assets/liabilities
Liabilities	Both actual and contingent liabilities
Assets	Title and control over assets; assets pledged as collateral; charges against assets
Legal/Regulatory	Aspects of laws and regulations affecting FS, including non-compliance

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### Auditor's Evaluation of Management's Intentions

When evaluating representations about management's plans and intentions (e.g., plan to hold an asset vs. sell it), the auditor considers:

1. Entity's past history — has management followed through on stated plans before?

2. Reasons for choosing a particular course of action

3. Entity's ability to pursue the specific course of action

4. Existence of inconsistent evidence obtained during audit that conflicts with management's stated intentions

Worked example

### Example 1

Example 1: During the audit of LMN Ltd., management states (in the WIR) that they intend to hold a certain investment property for long-term appreciation and hence classify it under 'Non-current Assets.' The auditor finds that the company has recently listed the property for sale on a real estate portal.

Analysis: The auditor has found inconsistent evidence (listing for sale) that contradicts management's stated intention (hold for long-term). Under SA 580, the auditor evaluates management's intentions using past history, ability to hold the asset, and this inconsistent evidence. The WIR representation about classification may not be reliable; the auditor should seek further evidence or reassess the classification.

### Example 2

Example 2: The Chief Financial Officer (CFO) of a company who signed the audit engagement letter left the company mid-audit. A new CFO has joined. Is a new or updated WIR required?

Answer: Yes. When those who signed the engagement no longer have relevant responsibilities (change in personnel), it is necessary to re-obtain or reaffirm the WIR from the new person(s) responsible. The new CFO must provide the WIR confirming management's responsibilities.

### Example 3

Example 3: Management of a company has provided the auditor with a WIR confirming all liabilities are recorded. Later, the auditor discovers through third-party confirmation that a contingent liability related to a pending lawsuit was not disclosed.

Analysis: This contradicts the WIR on completeness of information. Under SA 580, the auditor should assess the reliability of the WIR and other evidence. This could indicate management is not providing complete information — a significant issue affecting the audit conclusion.

⚠️ Common exam mistakes

Thinking the WIR only covers 'main' responsibilities — it also includes supplemental/other representations covering accounting policies, contingent liabilities, assets, and legal compliance.
Ignoring the need to re-obtain WIR when key management personnel (like CFO) change during the audit period.
Accepting management's stated intentions at face value without evaluating against past history, ability to act, and any inconsistent audit evidence.
Not recognising that representations about contingent liabilities are part of the WIR — both actual AND contingent liabilities must be covered.
Forgetting that 'other WIRs' are supplemental to (not replacements for) the main WIR about management's fundamental responsibilities.

Reference:

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SA 580 – Written Representations: Content (Management Responsibilities, Completeness, Other WIRs)

Worked example

⚠️ Common exam mistakes