Document ID: chunk:federal_register_of_legislation:F2023C00330:reg:10:p9
Version: federal_register_of_legislation:F2023C00330
Segment Type: reg
Provision Reference: reg 10 (pt 9/14)
Character Range: 32235–35352

paragraph 10 or 11.  Consequently, the relevant matters covered by such a statement need not be included in the representation letter.  Factors that may affect the auditor's determination include:

           * Whether the statement includes confirmation of the fulfilment of the responsibilities referred to in paragraphs 10 and 11.

           * Whether the statement has been given or approved by those from whom the auditor requests the relevant written representations.

           * Whether a copy of the statement is provided to the auditor as near as practicable to, but not after, the date of the auditor's report on the financial report (see paragraph 14).

A20.         A formal statement of compliance with law or regulation, or of approval of the financial report, would not contain sufficient information for the auditor to be satisfied that all necessary representations have been consciously made.  The expression of management's responsibilities in law or regulation is also not a substitute for the requested written representations.

A21.         Appendix 2 provides an illustrative example of a representation letter.

Communication with Those Charged with Governance (Ref: Para. 10‑11, 13)

A22.         ASA 260 requires the auditor to communicate with those charged with governance the written representations which the auditor has requested from management.[7]

Doubt as to the Reliability of Written Representations and Requested Written Representations Not Provided

Doubt as to the Reliability of Written Representations (Ref: Para. 16‑17)

A23.         In the case of identified inconsistencies between one or more written representations and audit evidence obtained from another source, the auditor may consider whether the risk assessment remains appropriate and, if not, revise the risk assessment and determine the nature, timing and extent of further audit procedures to respond to the assessed risks.

A24.         Concerns about the competence, integrity, ethical values or diligence of management, or about its commitment to or enforcement of these, may cause the auditor to conclude that the risk of management misrepresentation in the financial report is such that an audit cannot be conducted.  In such a case, the auditor may consider withdrawing from the engagement, where withdrawal is possible under applicable law or regulation, unless those charged with governance put in place appropriate corrective measures.  Such measures, however, may not be sufficient to enable the auditor to issue an unmodified audit opinion.

A25.         ASA 230 requires the auditor to document significant matters arising during the audit, the conclusions reached thereon, and significant professional judgements made in reaching those conclusions.[8]  The auditor may have identified significant issues relating to the competence, integrity, ethical values or diligence of management, or about its commitment to or enforcement of these, but concluded that the written representations are nevertheless reliable.  In such a case, this significant matter is documented in accordance with ASA 230.