# SA 580 – Written Representations
## Concept
A Written Representation (WR) is a written statement by management provided to the auditor to confirm certain matters or to support other audit evidence.
A WR does NOT include:
- Financial statements,
- Assertions, or
- Supporting books and records.
## WR as Audit Evidence
- WR is necessary audit evidence.
- However, WR alone does NOT provide SAAE.
- The fact that management has provided reliable WR does not affect the nature/extent of other audit evidence required.
- If a WR was obtained on a specific assertion earlier, an updated WR may be necessary.
## Objectives of the Auditor
1. Obtain WR from management and TCWG that they have fulfilled their responsibility for preparation of FS and for completeness of information provided.
2. Support other audit evidence by means of WR.
3. Respond appropriately to WR provided, or to refusal to provide WR.
## WR About Management's Responsibilities
### a) Preparation of FS
Management may include qualifying language ('to the best of our knowledge and belief'). Auditor may accept if satisfied that WR is made by those with appropriate responsibilities & knowledge.
### b) Information Provided & Completeness of Transactions
Auditor shall obtain WR that:
- Management has provided all information and access as agreed in the terms of engagement.
- All transactions have been recorded and reflected in the FS.
### Description of Management's Responsibilities in WR
Should be described in the same manner as in the terms of engagement.
## Why WR for Management's Responsibilities is Necessary
Other audit evidence is insufficient without confirmation from management — the auditor cannot judge solely from other evidence whether management has fulfilled its responsibility.
Auditor may ask management to reconfirm acknowledgement in subsequent years when:
- Terms were prepared in previous year.
- There are changes in circumstances.
- Signatories of terms no longer have relevant responsibilities.
- There is indication management misunderstands its responsibilities.
## Other Written Representations (Beyond Mgt Responsibilities)
Auditor may consider necessary to request WR on:
- Whether management has communicated all known deficiencies in IC.
- Whether selection and application of accounting policies are appropriate.
- Whether the following matters have been recognized, measured, presented or disclosed as per FRF:
- Plans/intentions affecting carrying value or classification of assets/liabilities.
- Liabilities (actual and contingent).
- Title to assets, liens, encumbrances, assets pledged as collateral.
- Aspects of laws/regulations/contractual agreements affecting FS.
## WR About Specific Assertions
When obtaining evidence on judgments and intentions, auditor may consider:
- Entity's history of carrying out stated intentions.
- Entity's reasons for the particular course of action.
- Entity's ability to pursue the course of action.
- Existence of other information inconsistent with management's judgment/intent.
## Date and Period Covered
### Date of WR
- Shall be as near as practicable to, but NOT after, the date of the auditor's report.
- The report cannot be dated before the date of WR (WR is necessary evidence).
- Reason: auditor is concerned with events up to the date of the report.
### Period Covered
- WR shall cover all periods referred to in the FS — management must reaffirm prior representations remain appropriate.
- This applies even when current management was not present during all such periods (their absence does not diminish responsibility for FS as a whole).
## Form of WR
- WR shall be a representation letter addressed to the auditor.
- If L&R requires management to make written public statements, and the auditor determines those statements provide the required WR, they need not be repeated in the representation letter.
## Doubt as to Reliability of WR
- If WR is inconsistent with other audit evidence, attempt to resolve.
- If unresolved, reconsider assessment of competence, integrity, ethical values of management; assess effect on reliability of WR and audit evidence generally.
- If auditor concludes WR is not reliable, take appropriate action including Disclaimer of Opinion.
## Requested WR Not Provided
Auditor shall:
- Discuss matter with management.
- Re-evaluate integrity of management; assess effect on reliability of WR and audit evidence generally.
- Take appropriate action, including Disclaimer of Opinion.