Section Written Representations (Ref: Para. 40) - ASA 240 - The Auditor’s Responsibilities Relating to Fraud in an Audit of a Financial Report - October 2009 - Written Representations (Ref: Para. 40)

ASA 580[28] establishes requirements and provides guidance on obtaining appropriate representations from management and, where appropriate, those charged with governance in the audit. In addition to acknowledging that they have fulfilled their responsibility for the preparation of the financial report, it is important that, irrespective of the size of the entity, management and, where appropriate, those charged with governance acknowledge their responsibility for internal control designed, implemented and maintained to prevent and detect fraud.
Because of the nature of fraud and the difficulties encountered by auditors in detecting material misstatements in the financial report resulting from fraud, it is important that the auditor obtain a written representation from management and, where appropriate, those charged with governance confirming that they have disclosed to the auditor:
1. The results of management’s assessment of the risk that the financial report may be materially misstated as a result of fraud; and
2. Their knowledge of actual, suspected or alleged fraud affecting the entity.

Written Representations (Ref: Para. 40)Written Representations (Ref: Para. 40)