SA 580- CA A is the auditor of X Ltd, a listed entity. CA A wants management to sign a written representation on the implementation of their internal financial controls over financial statements. The Directors of X Ltd argue that they have already signed a Directors Responsibility Statement u/s 134 of Companies Act, 2013 whereby they have stated about the effective implementation of Internal Financial Controls over Financial Statements. The CFO of the company himself being an experience Chartered Accountant reminds CA A about the restrictions in SA 580 on CA A's rights for demanding written representations on the matters addressed by written public statement prescribed by Law. What should be the response of CA A in this case?
a. There is no such restriction under auditing pronouncements and hence CA A has an absolute right to demand this written representation.
b. CFO is partially correct that there is a statement in SA 580 for such matters. However the decision whether such matters are addressed by written public statement prescribed by law or not is upto CA A and hence management cannot consider it as a restriction.
c. The CFO is correct because SA 580 clearly says- If law or regulation requires management to make written public statements about its responsibilities the relevant matters covered by such statements need not be included in the representation letter.
(option selection in next msg)

SA 580- CA Raju is the auditor of Baburao Limited. The auditor wants management to sign written representations about its responsibilities as prescribed in the terms of engagement. The company's CFO has signed written representation with a qualifying language 'to the best of our knowledge and information available with us we hereby state the following.....' What should be the response of CA Raju?
a. He should not accept such written representation because CFO is expected to know about the operations of the company.
b. He should accept such written representation because CFO is not expected to provide absolute assurance.
c. He may accept it provided he is satisfied that such representation is made by an informed person after making inquiries.
d. He may accept it provided he is satisfied that such representation is made by an informed person after making inquiries. Additionally he may ask CFO to include a statement that he has made sufficient inquiries to enable him to make such written representation.
(option selection in next message)

SA 580- CA Pushpa is the auditor of Rajesh Tiles Limited. Rajesh Tiles Limited is a big unlisted public company with Board of Directors, Audit Committee and a separate dedicated CEO and CFO. CA Pushpa is now confused who is the appropriate authority to sign on written representation as per SA 580.
a. MD of the Company along with Chairman of Audit Committee.
b. CFO of the Company
c. CEO of the Company.
d. CEO or CFO of the company
(option selection in next message)

I am noticing some basic loopholes in your concept of Written representation. I will now ask you two to three simple questions. Just need to know whether your basics are right or not before I increase the depth of questions. I hope you are ready.

See just keep answering. If you go wrong, you can check out the relevant paras of the SAs.

Will ask more questions tomorrow. Keep revising. Be ready for some difficult questions on SA 580 itself.

SA 580- CA A is the auditor of Alpha Limited. CA A wants management to give a written representation as per SA 580 on the classification of investments and confirm the figures of short term and long term investments. Management, although agreed to provide other representations, has refused to provide a representation on the classification of investments. Management is of the view that there is a separate investment committee which has passed resolution and its a copy has been provided to the auditor and hence there is no need of a separate written representation. Management is of the view that auditor is unnecessarily trying to obtain too many confirmations from multiple authorities on the same matter and which is leading to over-compliance. Management argues that a good and solid evidence along with investment accounts have been given to the auditor and hence there is no question of a separate representation on this matter. Auditor still maintains that he wants to include this point and management has provided written representation sans this point of investment classification. What should be the final response of the auditor?
(option selection in next message)

Hi guys, I lost my grandmother recently followed by bad health since a couple of days. Thats why MCQs were halted. It will resume within a couple of days. Sorry for that.

Hi, preparing a video on the new icai mcq book and hence was on a pause.. because may 22 students need it... Will resume soon with quality MCQs..

https://youtu.be/gF7Ez1BBNPg

Success stories of students who converted their failure into biggest success.

*Must watch for every CA FINAL STUDENT who fears Audit subject.*

Highly motivating video by CA Pragnesh Kanabar sir.

Just see this if anyone is feeling low!

*CA FINAL AUDIT LATEST MCQs by THE ICAI* for May 22 attempt *Free Live session by CA Pragnesh Kanabar* on *26th Feb 2022 5pm to 9pm*. Set your reminder here. The session will be taken in Hinglish (60-70% English with some Hindi) in a style that it is suitable for Pan India Students. Share it with your friends. If students cant attend live and want to see it as recorded version then it will be available for a nominal fee on Sir's app (details of app in the description of this video). If you want to see it as a free session then please attend the Youtube Live. Quality discussions with some useful notes will be done. For Sir's in-house students (who have enrolled for paid courses) recorded version will be uploaded in the mobile app itself for viewing without any additional fees. https://youtu.be/aG54DaeK2UQ

SA 501- You are the auditor of Alpha Industries Limited, a manufacturing company dealing in defence manufacturing for Indian Army and Navy. For operational reasons, the storage locations of the company are placed near the border areas. While auditing the financial statements for the FY 21-22, as usual, you wanted to attend the inventory count done by the employees as on year end. However, the border areas are volatile and its unsafe to visit the border areas for civilians. That's why you have decided, due to safety reasons, that you will not be attending the inventory count this year. You requested management to arrange a video conferencing infrastructure for virtual verification. Due to national security reasons, the internet connection is cut-off and there is no possibility of video conferencing. However, management has assured you that they can arrange your visit with tight security arrangements and under police observation. You have concluded that attendance is impracticable as you cannot risk the safety of your audit team. You have further concluded that there is no alternate procedure that can satisfy you. There are some work sheets of inventory count with accounts department but it is not satisfying you and hence you are not convinced on the inventory figure that is appearing in the financial statements. What should be the approach of the auditor in this regard?
a) Verify the available worksheets and be satisfied with that evidence due to the given circumstances. Issue clean opinion on the financial statements and explain the circumstances in other matter para that you were unable to attend inventory count.
b) Modify opinion (either qualified or disclaimer) as per SA 705 because it creates a limitation on scope of audit due to the circumstances.
c) Perform reconciliation of the inventory with backward calculation to the opening balance. Additionally, obtain a written representation from the management regarding the amount of inventory and its condition. In such exceptional situations, we can rely on the written representation of the management.
d) Modify opinion (either qualified or adverse) as per SA 705.