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CA Final · Advanced Auditing, Assurance and Professional Ethics · Completion and Review

During the audit of Himalaya Hotels Ltd, the auditor finds that the written representations requested from management are needed on matters beyond the standard ones, as the entity's circumstances give rise to additional management responsibilities. What is the appropriate approach under SA 580 as modified for Indian standards?

The auditor should consider obtaining additional written representations where the entity's circumstances or management's responsibilities give rise to them. The Indian SA 580 keeps this idea for non-public sector entities as well, since the standards apply equally to all entities irrespective of form, nature and size.

  1. AIgnore the matter since only the standard representations are allowed
  2. BConsider obtaining additional written representations where certain entities' circumstances or management responsibilities give rise to themCorrect
  3. CReplace audit evidence on such matters with the representations alone
  4. DObtain additional representations only for public sector entities

Explanation

The Indian SA 580 retains the spirit of the paragraph noting that, for certain entities, management responsibilities may give rise to the need for additional representations. The specific reference to public sector entities was deleted because the standards apply to all entities. Option D is wrong because the point is not restricted to public sector entities.

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