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Evidence

Written representations

ISA 580 Written Representations provides the following guidance.

A Written representation is a written statement by management
provided to the auditor to confirm certain matters or to support other
audit evidence.

3.1 Purpose

 to obtain evidence that management, and those charged with governance, have
fulfilled their responsibility (as agreed and acknowledged in the terms of the
audit engagement) for the preparation of the financial statements, including:

 preparing the financial statements in accordance with an applicable
financial reporting framework.

 providing the auditor with all relevant information and access to records.

 recording all transactions and reflecting them in the financial statements.

 to support other audit evidence relevant to the financial statements if
determined necessary by the auditor or required by ISAs, for example:

 plans or intentions that may affect the carrying value of assets or liabilities.

 confirmation of values where there is a significant degree of estimation or
judgment involved, e.g. provisions and contingent liabilities.

 formal confirmation of the directors’ judgment on contentious issues, e.g.
the value of assets where there is a risk of impairment.

 aspects of laws and regulations that may affect the financial statements,
including compliance.

Note that written representations cannot substitute for more reliable
evidence that should be available and do not constitute sufficient
appropriate evidence on their own, about any of the matters with which
they deal.

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