Written Representation refers to written or oral confirmation by management regarding the items presented in financial statements. The auditor can use the representation as audit evidence considering the following procedure:

1) Auditor should generally obtain the representation by management in writing.
2) Evaluate the representation and find out whether it is consistent with other audit evidence available.
3) Whether the person making representation on behalf of management is well informed of the matter.

Following are the basic elements of Management representations:

1) It should be addressed to the auditor.
2) It should be dated as of the report date or a date prior to it.
3) It should be signed by the C.E.O or the C.F.O.
4) It should contain relevant information.

Professional judgement should be used by the auditor for determining the matters on which he wishes to obtain representations.

Management representation is not a substitute for other audit evidence and if contradicted by such other audit evidence, the auditor may reconsider the reliability of management representations. So, one should always keep in mind that written representation alone cannot serve as independent audit evidence but a additional evidence supporting the fact.

In case management is not willing to give in writing the representations made by it during the course of audit, the auditor should prepare a letter in writing setting out his understanding of management’s representations that have been made to him during the course of his audit and send it to the management with a request to acknowledge and confirm that his understanding of the representations is correct. If the management refuses to acknowledge or confirm the letter sent by the auditor, this will constitute a limitation on the scope of his examination. In such circumstances the auditor should evaluate any reliance on those representations and consider if the refusal may have any additional effect on his report.