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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Completion and final review

During the final review of the audit of Zenith Plc, the audit senior finds that the audit team has not yet obtained a signed written representation letter from management. The audit manager proposes to date the auditor's report before the letter arrives so the report can be issued on time. Which statement is correct under ISA 580 Written Representations?

The auditor's report must not be dated before written representations are obtained. ISA 580 requires the letter to be dated as near as practicable to, but not after, the report date, because the representations form part of the evidence on which the opinion rests.

  1. AThe auditor's report may be dated before the representations are received if the engagement partner approves
  2. BWritten representations should be dated as near as practicable to, but not after, the date of the auditor's report, so the report should not be dated before they are obtainedCorrect
  3. CWritten representations are optional where the auditor has performed extensive substantive testing
  4. DOral representations from the finance director are sufficient if recorded in the audit file

Explanation

ISA 580 requires the representation letter to be dated as near as practicable to, but not after, the date of the auditor's report. The report cannot be dated before the representations are obtained because they are part of the evidence supporting the opinion. Oral representations alone are not enough where written ones are required, and substantive testing does not remove the requirement.

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