## SA 580: Written Representations

### Meaning

A written statement by management provided to the auditor to:

Confirm certain matters, OR
Support other audit evidence

> Excluded: Financial statements themselves, assertions therein, or supporting books and records — these are NOT written representations.

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### Basic Elements

1. Written statement by management to confirm matters or support evidence

2. Does NOT include financial statements or supporting records

3. Auditor shall request WR confirming management has fulfilled its responsibility for preparation of FS in accordance with the applicable FRF

4. WR must cover all FS and all periods referred to in the auditor's report

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### Written Representations as Audit Evidence

Property	Implication
Necessary audit evidence	Auditor must obtain WR — cannot skip it
NOT sufficient audit evidence	WR alone cannot support an audit conclusion
Does NOT dilute auditor's duty	Auditor must still obtain other evidence for matters covered by WR

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### Three Categories of Additional Written Representations

#### 1. Financial Statements

Selection and application of accounting policies
Recognition, measurement, presentation, and disclosure in FS in accordance with FRF
Carrying value of assets and liabilities

#### 2. Information Provided to Auditor

Management has disclosed all known deficiencies in internal controls to the auditor

#### 3. Specific Assertions

Management's intentions and judgments relevant to specific items in FS (e.g., intent to hold a financial asset to maturity)

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### Management's Refusal to Provide WR

If management refuses one or more requested WRs, the auditor shall:

1. Discuss the matter with management

2. Re-evaluate management's integrity and the effect on reliability of all representations (oral or written) and audit evidence generally

3. Take appropriate action — including considering effect on the opinion

> Refusal to give WR typically leads to a Disclaimer of Opinion (not a Qualified Opinion) because it creates a pervasive limitation on audit scope.

Worked example

### Example 1

WR as necessary but not sufficient: During the audit of ZZZ Ltd., management provides a WR stating all related party transactions have been disclosed. The auditor cannot rely on this alone — they independently review contracts, board minutes, and third-party confirmations. The WR corroborates but does not replace other evidence.

### Example 2

Refusal → Disclaimer of Opinion: The Managing Director of PQR Ltd. refuses to sign the WR regarding completeness of contingent liabilities, citing legal risk. Auditor: (1) discusses with audit committee, (2) re-evaluates management's integrity and concludes there is a pervasive scope limitation, (3) issues a Disclaimer of Opinion because the refusal prevents forming any opinion on the FS.

### Example 3

Specific Assertion WR: A company holds bonds that it classifies as 'held-to-maturity' under Ind AS 109. The auditor requests a WR confirming management's intent and ability to hold them to maturity — this supports the accounting classification but the auditor also independently evaluates the entity's liquidity position.

⚠️ Common exam mistakes

Treating WR as sufficient audit evidence on its own — WR is necessary but NEVER sufficient alone; corroborating evidence is always required.
Confusing WR with financial statements — financial statements, the assertions therein, and supporting records are explicitly excluded from the definition of written representations.
Assuming management's refusal to give WR leads to a Qualified Opinion — the correct response is a Disclaimer of Opinion, because refusal typically creates a pervasive limitation on audit scope.
Forgetting that WR must cover ALL financial statements and ALL periods referred to in the auditor's report — a WR for only one year of a comparative FS is insufficient.

Bare-Act text Para A1–A2 · SA 580 - Written Representations (ICAI) · click to expand

Written representations are necessary information that the auditor requires in connection with the audit of the entity's financial statements. Accordingly, similar to responses to inquiries, written representations are audit evidence. However, if written representations are inconsistent with other audit evidence, the auditor shall perform audit procedures to attempt to resolve the matter.

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Meaning, Basic Elements, WR as Audit Evidence, and Management Refusal

Worked example

⚠️ Common exam mistakes