Udit & Co. is the statutory auditor of Fun Journey Ltd., a company engaged in the tours and travel business. The company has an annual turnover…

CA Final · Advanced Auditing, Assurance and Professional Ethics · RTP · May 2025
Udit & Co. is the statutory auditor of Fun Journey Ltd., a company engaged in the tours and travel business. The company has an annual turnover of 1,200 crores and profits of 150 crores. While planning, the auditors discussed the requirement for a written representation letter from management for confirming that: (i) The auditor is provided with all relevant information and access as agreed in the terms of the audit engagement; and (ii) All transactions have been recorded and are reflected in the financial statements As the audit was near to completion, the auditor disagreed with the management on one of the matters including need of written representation contending that verbal confirmations given during the audit should be sufficient. Thus, separate written representation is not required. Udit & Co., however, explained that under SA 580 obtaining a formal written statement from management is mandatory. Fun Journey Ltd. refuses to provide a written representation letter, despite the auditor's several requests. (b) What should be the form of such written representation?

Suggested Answer and Working Notes:

The written representations as per SA 580, shall be in the form of a representation letter addressed to the auditor. If law or regulation requires management to make written public statements about its responsibilities, and the auditor determines that such statements provide some or all of the representations required, the relevant matters covered by such statements need not be included in the representation letter.

Topics: Standard on Auditing (SA), CARO 2020

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