Skip to content

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

Tara Auditors are finalising the audit of Himalaya Cements Ltd. and request written representations. Management's CFO gives a representation on a matter where other audit evidence is available. Which conclusion is correct?

Written representations are necessary audit evidence, but they do not on their own provide sufficient appropriate audit evidence about the matters they cover. The auditor must still gather other evidence, so they cannot replace it.

  1. AWritten representations are not evidence at all and can be ignored
  2. BWritten representations are necessary audit evidence but do not provide sufficient appropriate audit evidence on their own about the matters they coverCorrect
  3. CWritten representations from management replace all other audit evidence on that matter
  4. DWritten representations are needed only for related party transactions

Explanation

Under SA 580, written representations are necessary information the auditor requires, but they cannot on their own provide sufficient appropriate audit evidence about the matters they cover. Obtaining reliable representations does not affect the nature or extent of other audit evidence about management's fulfilment of its responsibilities. Treating them as a substitute for other evidence is therefore wrong.

Did you get it right without looking?

One question tells you little. A timed set on Completion and Review shows your real accuracy, how long you take and where you lose marks.

Practise Completion and ReviewFree diagnostic mock

More Completion and Review questions