## Written Representations – Reliability Concerns & Non-Provision

### When Auditor Has Concerns About Management's Competence / Integrity / Ethical Values

If the auditor develops doubts about management's competence, integrity, or ethical values, they must:

1. Determine the effect of such concerns on the reliability of the Written Representation (WIR) and on audit evidence already gathered.

### WIR Inconsistent with Other Audit Evidence

If a WIR contradicts other audit evidence:

Step	Action
1	Perform additional audit procedures to resolve the inconsistency
2	If unresolved → Disclaim Opinion (SA 705)

### WIR Not Provided by Management

When management refuses to provide a requested WIR:

```

Step 1: Discuss the matter with management (Those Charged With Governance)

Step 2: Re-evaluate the integrity of management

Step 3: Evaluate the effect on reliability of WIR and audit evidence

Step 4: Take appropriate actions, including possible effect on opinion

→ SA 705: Disclaimer of Opinion

```

### Key Principle

WIR supplements but does not substitute other audit evidence. The auditor cannot accept a WIR as a replacement for obtaining sufficient appropriate audit evidence (SAAE) where evidence is otherwise obtainable.

Worked example

### Example 1

Example 1: During the audit of ABC Ltd., management provides a WIR stating that all receivables are recoverable. However, audit evidence shows 30% of debtors are overdue by more than 365 days with no recovery action taken. The auditor must perform procedures to resolve this inconsistency (circularise debtors, review subsequent receipts). If unresolved, the auditor disclaims opinion on recoverability.

### Example 2

Example 2: Management of XYZ Ltd. refuses to sign the WIR regarding the completeness of disclosed related-party transactions. The auditor first discusses with TCWG, then re-evaluates management integrity. Since refusal raises doubt about completeness of disclosures, the auditor issues a Disclaimer of Opinion under SA 705.

⚠️ Common exam mistakes

Treating WIR as sufficient audit evidence on its own – WIR is corroborative, not primary evidence.
Confusing 'Disclaimer of Opinion' (used when WIR not provided or inconsistencies unresolved) with 'Qualified Opinion' (used for limited-scope issues).
Failing to document the reasons for concerns about management integrity before escalating to a disclaimer.

Bare-Act text SA 705, Para 9 · SA 705 – Modifications to the Opinion in the Independent Auditor's Report (ICAI) · click to expand

The auditor shall disclaim an opinion on the financial statements if the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.

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Written Representations – Reliability Concerns and Non-Provision (SA 580)

Worked example

⚠️ Common exam mistakes