CA Shreyansh is carrying out an audit of restated financial statements of MBC Limited for past 3 financial years i.e. 2024-25, 2023-24, and 2022-23…

In the given situation, CA Shreyansh is carrying out an audit of restated financial statements of MBC Limited for past 3 financial years i.e., 2024-25, 2023-24 and 2022-23 so he requested Management Representation Letter from the management of the Company for this assignment before issuance of the report. The management of the Company provided the Management Representation Letter only for the financial year 2024-25 as they were not in place during that period. As per SA 580, “Written Representations”, as written representations are necessary audit evidence, the auditor's opinion cannot be expressed, and the auditor's report cannot be dated before the date of the written representations. As per SA 560, “Subsequent Events", the auditor is concerned with events occurring up to the date of the auditor's report that may require adjustment to or disclosure in the financial statements, the written representations are dated as near as practicable to, but not after, the date of the auditor's report on the financial statements. In some circumstances it may be appropriate for the auditor to obtain a written representation about a specific assertion in the financial statements during the audit. Where this is the case, it may be necessary to request an updated written representation. The written representations are for all periods referred to in the auditor's report because management needs to reaffirm that the written representations it previously made with respect to the prior periods remain appropriate. The auditor and management may agree to a form of written representation that updates written representations relating to the prior periods by addressing whether there are any changes to such written representations and, if so, what they are. Situations may arise where current management was not present during all periods referred to in the auditor's report. Such persons may assert that they are not in a position to provide some or all the written representations because they were not in place during the period. This fact, however, does not diminish such persons' responsibilities for the financial statements as a whole. Accordingly, the requirement for the auditor to request from them written representations that cover the whole of the relevant period(s) still applies. Therefore, as per the above requirement of SA 580, CA Shreyansh should take written representation letter from management of MBC Limited for the financial year 2023-24 and 2022-23 also. In case the management of MBC Limited does not provide written representation as requested, the auditor shall discuss with the management, re-evaluate the integrity of management, and take appropriate actions including the impact on the audit report as per SA 705.