Manifestaciones escritas o carta de representación obtenida de una auditoría de EF, según NIA 580

Summary

The video script discusses the importance of the written representation letter or management letter in financial statement audits, as per the NIA 580 standard. It emphasizes the need for auditors to obtain this letter from management and, if applicable, from corporate governance bodies, to ensure the accuracy and integrity of financial statements. The letter should reflect the management's responsibility for financial preparation, internal control systems, fraud monitoring, and tax policy. The script also advises on the timing of obtaining this letter, ideally close to the auditor's report date, and the consequences of not obtaining it, which may lead to a qualified opinion or abstention from expressing an opinion due to significant limitations.

Takeaways

• 📝 The script discusses the NIA 580 standard, which pertains to written representations or letters of representation obtained in relation to an audit of financial statements.
• 🔔 It emphasizes the importance of subscribing to the channel and sharing content for broader access to useful information.
• 📑 The representation letter or written representations are documents related to financial statement audits, where the auditor must perform procedures to obtain these statements from management and, if applicable, those in charge of corporate governance.
• 📝 The letter should be requested from top management and, if a corporate governance body exists, from them as well, to ensure it reflects the auditor's findings.
• 👤 In the letter, management is expected to affirm their responsibility for the preparation and presentation of financial statements, the design and operational effectiveness of internal control systems, monitoring for fraud, and maintaining tax policies to avoid inaccuracies.
• 📋 The auditor should ensure that the procedures performed align with the representations made in the letter, confirming congruence between management's statements and the auditor's findings.
• 📅 The appropriate time to obtain the representation letter is as close as possible to the date of the auditor's report, but not later, to maintain the integrity and relevance of the audit evidence.
• 🚫 If the representation letter is not obtained, the auditor must consider the implications as per NIA 580 and NIA 75, potentially qualifying their opinion or abstaining from expressing an opinion if the limitation is significant.
• 🖋 The letter should be signed by individuals involved in the preparation of financial statements, including the chief accountant, financial manager, and those responsible for monitoring financial statements, as well as representatives from the board of directors or corporate governance if applicable.
• 🏢 The representation letter is typically provided on the company's letterhead and is given to the auditor towards the end of the audit process.
• 📈 The letter serves as a formal document where the administration acknowledges the scope of the audit, their responsibilities, and the possibility of other audits with different scopes, and is documented as part of the audit evidence.

Q & A

What is the main topic of the video script?

The main topic of the video script is the discussion of the NIA 580 standard, which refers to written representations or letters of representation obtained in relation to an audit of financial statements.

What does NIA 580 stand for?

NIA 580 is a standard that guides auditors on how to obtain written representations or affirmations from management and, when applicable, those charged with governance regarding the financial statements.

Who should provide the written representations or affirmations according to NIA 580?

According to NIA 580, the written representations should be provided by the management and, if there is a corporate governance body, by those charged with governance.

What are the responsibilities that should be acknowledged in the written representations?

In the written representations, the management should acknowledge their responsibility for the preparation and presentation of the financial statements, the design and operational effectiveness of the internal control system, monitoring for fraud, and designing and maintaining tax policies to ensure the accuracy of the financial statements.

What is the purpose of obtaining the written representations?

The purpose of obtaining the written representations is to ensure that the auditors' procedures are congruent with the management's assertions and to gather evidence that supports the financial statements being audited.

Can the auditor request a specific letter for an issue that arose during the period?

Yes, the auditor can request a specific letter for an issue that arose during the period if they consider it necessary, in addition to the standard written representations.

What is the appropriate timing for obtaining the written representations according to NIA 580?

According to paragraph 14 of NIA 580, the written representations should be obtained as close as possible to the date of the auditor's report, but not later than the date of the report.

What happens if the auditor does not obtain the written representations?

If the auditor does not obtain the written representations, NIA 580, specifically paragraph 19, suggests considering the effect on the audit opinion, and paragraph 20 allows the auditor to refrain from expressing an opinion if the limitation is significant.

Who should sign the written representations?

The written representations should be signed by those involved in the preparation of the financial statements, including the chief financial officer, financial manager, and any relevant executives or members of the corporate governance body if it exists.

What is the general format of the written representations?

The written representations are generally a letter on the company's letterhead, signed by the executives, acknowledging their awareness of the audit scope, their responsibilities, and any other concurrent audits with different focuses.

Why is the written representations letter important for the auditor?

The written representations letter is important for the auditor as it serves as part of the audit evidence, and in some cases, it may be the only document that provides evidence of the management's assertions.