1. Surma Pharma Ltd has a 30 June 2026 year end. The auditor completed all procedures, including the subsequent events review, on 9 September 2026. The board approved the financial statements on 12 September 2026. The representation letter, signed by the Managing Director and Chief Financial Officer, is dated 14 September 2026. What is the earliest date the auditor's report may carry?

A) 14 September 2026, because the report cannot be dated before the representation letter, which is the latest of the three dates
B) 9 September 2026, because the report date is when sufficient evidence was obtained and the letter merely repeats earlier evidence
C) 12 September 2026, because board approval is the last event management controls and the letter only confirms matters already approved
D) 30 September 2026, because the report is dated when members receive the statements and the letter sets only a minimum date

Correct: A complex ISA 580

Written representations are necessary audit evidence, so the auditor's opinion cannot be expressed, and the report cannot be dated, before the date of the representation letter. The report date must also not precede board approval or the completion of sufficient appropriate evidence. The three dates are 9, 12 and 14 September, so the binding constraint is the letter dated 14 September 2026. Choosing the approval date ignores that the letter is itself evidence, and choosing the evidence date overlooks the approval and the letter.

2. In the audit of Karnaphuli Cement Ltd the team accumulated these misstatements (CU): revenue cut-off overstated 180,000; inventory overstated 95,000; accruals understated 60,000; depreciation understated 22,000; prepayment misclassified 14,000; returns provision understated 31,000. Management corrected only the inventory item. The clearly trivial threshold is CU 25,000. What total should the attached schedule show?

A) CU 271,000, being the uncorrected items above the clearly trivial threshold (revenue cut-off, accruals and returns provision)
B) CU 402,000, being all misstatements identified, because management's belief that they are immaterial relates to every item found
C) CU 307,000, being every uncorrected item identified, because the attached schedule must be complete down to the smallest item
D) CU 366,000, being every item above the threshold, because the inventory item was found by the auditor rather than by management

Correct: A difficult ISA 450

The schedule attached to the representation letter lists uncorrected misstatements that the auditor accumulated. Items below the clearly trivial threshold (depreciation 22,000 and prepayment 14,000) are not accumulated, and the inventory item (95,000) was corrected. That leaves 180,000 + 60,000 + 31,000 = CU 271,000. Including corrected items or trivial items overstates the schedule, and management's belief that the effect is immaterial does not replace the auditor's own evaluation against materiality.

3. Teesta Logistics Ltd's Managing Director signs the representation letter except for the paragraph confirming that all transactions have been recorded. He explains that cash sales at a newly acquired depot may not have been captured, and the extent cannot be determined. After discussion with those charged with governance, the matter remains unresolved. What should the auditor do?

A) Issue an unmodified opinion relying on the signed paragraph on information provided, because it gives equivalent comfort on completeness
B) Qualify the opinion on depot sales only, because the possible misstatement is limited to one location and the rest is signed
C) Issue an unmodified opinion with an emphasis of matter on the depot, because the Managing Director's candour supports his integrity
D) Disclaim an opinion after discussion, because management has not given a mandatory representation on completeness of all transactions

Correct: D complex ISA 580

A written representation that management has recorded and reflected all transactions in the financial statements is one of the mandatory representations. If management does not provide it, the auditor discusses the matter, reevaluates integrity and, because this representation is mandatory, disclaims an opinion. A qualified opinion is not available because the auditor cannot limit the effect to one depot when management refuses to confirm completeness at all. Neither emphasis of matter nor the other signed paragraphs can replace the missing confirmation.

4. Dhansiri Tea Ltd's management signs the paragraphs on its responsibility for the financial statements, access to information and completeness of transactions. It refuses to confirm that all known instances of non-compliance with laws have been disclosed. The auditor knows of an unresolved BSEC query on late disclosures but has no other reason to doubt integrity. What is the most appropriate course?

A) Disclaim an opinion at once, because refusal of any representation required by an ISA makes all evidence unreliable and the opinion unsupportable
B) Obtain oral confirmation from the company secretary and treat it as equal to the refused written representation for the opinion
C) Discuss with management, reevaluate its integrity and the reliability of other representations, and determine the effect on the opinion
D) Proceed to an unmodified opinion, because the signed responsibility paragraphs satisfy the standard and the refused item is supplementary

Correct: C difficult ISA 580

The automatic disclaimer applies where the mandatory responsibility representations are refused or integrity doubts make them unreliable. For other requested representations, the auditor discusses the matter with management, reevaluates integrity and the reliability of other representations and evidence, and determines the possible effect on the opinion. The signed paragraphs do not cover the non-compliance confirmation. Oral replies cannot replace a written representation the auditor has asked for.

5. A fire destroyed the count sheets and stock records of Madhumati Rubber Ltd, and the auditor could not attend the count. Inventory is CU 14.6 million against overall materiality of CU 1.1 million. Management offers a letter from its senior officers confirming the year-end quantities. No alternative procedures yield evidence. Which statement is correct?

A) The letter is not a substitute for evidence; with no other evidence on a balance over thirteen times materiality, the opinion is modified
B) The letter is acceptable for the balance, because management has primary responsibility for inventory, and an emphasis of matter suffices
C) The letter is acceptable, because the loss was outside management's control and a signed representation is the best evidence left
D) The letter is acceptable if both senior officers sign it, because dual signature raises its reliability to that of external evidence

Correct: A difficult ISA 580

Written representations corroborate other evidence and cannot replace evidence that the auditor expects to exist, whatever the cause of its absence. Inventory of CU 14.6 million is about 13.3 times materiality of CU 1.1 million (14.6 / 1.1), so the missing evidence is clearly material. The auditor therefore cannot obtain sufficient appropriate evidence and modifies the opinion, with qualification or disclaimer depending on pervasiveness. Dual signature or an emphasis of matter paragraph does not cure a scope limitation.

6. Brahmaputra Steel Ltd's cash flow forecast shows a peak funding need of CU 2.4 million in month 8. The only committed facility is a CU 3.0 million overdraft that expires in month 4. The Chief Financial Officer represents in writing that the bank will renew on existing terms, but there is no bank correspondence. What is the auditor's position?

A) The representation proves the plan is infeasible, because a facility expiring before the peak need means a qualified opinion is required
B) The representation on plans is required but not enough; obtain evidence of renewal, because the CU 3.0m cover exists only if the bank renews
C) The representation is enough once it is re-dated nearer the report date, because an updated letter carries the weight of external evidence
D) The representation is enough, because management is best placed to know the bank's intentions and CU 3.0 million exceeds the CU 2.4 million peak need

Correct: B difficult ISA 570 (Revised)

The auditor requests written representations on management's plans for future actions and their feasibility, but they only support other evidence. The forecast is covered only if the CU 3.0 million facility is renewed, so the auditor needs bank correspondence or draft terms. Re-dating the letter adds no external corroboration. A qualified opinion is not automatic, because the auditor first evaluates evidence of renewal and then considers whether a material uncertainty exists and is adequately disclosed.

7. Ganges Paper Mills Ltd's representation letter states that a CU 3.2 million customer damages claim is remote and needs no provision. Overall materiality is CU 450,000. The external lawyer's letter says it is more likely than not that the company will have to pay most of the claim. The directors insist their representation is correct. What is the most appropriate response?

A) Obtain a second, more detailed letter reaffirming the remote view, because a reaffirmed representation resolves the conflict
B) Perform further procedures to resolve it, reconsider the reliability of other representations, and modify the opinion if no provision is made
C) Prefer the representation, because it is more recent and specific, and treat the lawyer's view as non-binding so a contingent liability note is adequate
D) Treat the inconsistency as proof of fraud and report to the regulator before any further procedures, because representations were false

Correct: B complex ISA 580

Where a representation conflicts with other evidence, the auditor performs procedures to resolve the matter and, if it remains unresolved, reconsiders its assessment of management and the reliability of representations generally. The claim is over seven times materiality (3.2m / 0.45m = 7.1), so a lack of provision or disclosure would be material and lead to a modified opinion. A reaffirmed letter adds no evidence. Proof of fraud is not established by disagreement over a legal assessment.

8. Shitalakkhya Chemicals Ltd's litigation is handled by the company secretary, who is not an executive. The Managing Director and Chief Financial Officer say they have no personal knowledge of the claims and ask the auditor to take the litigation representation from the company secretary by email only. Which approach is most appropriate?

A) Request the representation from the Managing Director and Chief Financial Officer, who must first make inquiries of the company secretary
B) Omit the written representation and rely on oral inquiry of the company secretary, because the claims will be covered by lawyers' letters
C) Accept the company secretary's email alone, because the person with direct knowledge gives the most reliable representation on the claims
D) Accept a statement from the Managing Director and Chief Financial Officer limited to matters of personal knowledge, which covers the claims

Correct: A difficult ISA 580

Representations are requested from management with responsibility for the financial statements and knowledge of the matters concerned. Where the signatories lack direct knowledge, they make inquiries of those who have it, and the letter states that it is given to the best of their knowledge and belief having made such inquiries. The company secretary's email is supporting evidence only. Personal knowledge limits would defeat the purpose, and lawyers' letters do not replace the representation.

9. Sundarban Seafood Ltd's draft letter confirms disclosure of 'all related party transactions exceeding CU 500,000'. Overall materiality is CU 600,000 and performance materiality CU 420,000. The auditor's procedures found a CU 85,000 loan to a director's company that was not disclosed by management. How should the auditor view the wording?

A) Acceptable, because the threshold is below overall materiality of CU 600,000, so misstatements that matter are covered
B) Unacceptable, because the representation must cover all related party transactions management is aware of, whatever their size
C) Acceptable if reduced to performance materiality of CU 420,000, because that limit is the lowest the auditor must cover
D) Acceptable, because management may tailor representations to its own materiality, provided the auditor's procedures cover smaller items

Correct: B difficult ISA 550

Auditing standards require management to confirm that it has disclosed the identity of related parties and all related party transactions of which it is aware, and that these are properly accounted for. Related party transactions matter by nature as well as size, so management cannot narrow the confirmation with its own threshold. The undisclosed CU 85,000 loan shows the harm, since it falls below every proposed limit yet is a related party transaction needing disclosure.

10. Midway through the Surjo Garments Ltd audit, the Chief Financial Officer states in a signed email that no loans to directors exist. A bank statement shows CU 1.8 million paid to a director's company. The CFO apologises and offers an expanded representation letter confirming all loans are now disclosed. What should the auditor conclude?

A) The apology and expanded letter restore reliability, so other representations may be relied on without changing the planned procedures
B) The auditor must withdraw immediately, because any false statement by management makes ISA 580 representations impossible to obtain
C) Integrity is in doubt, so reassess the reliability of all representations and other evidence; the expanded letter alone is not enough
D) The doubt covers only the director loan assertion, so representations on other matters remain reliable without further consideration

Correct: C complex ISA 580

The auditor who has doubts about management's integrity determines the effect on the reliability of representations, oral and written, and of audit evidence in general. A false statement about a CU 1.8 million director loan raises such doubts and affects the risk assessment, so more extensive procedures and communication with those charged with governance are needed. A fresh letter is only another representation from the same source. Withdrawal is not automatic, because the auditor first evaluates the effect and the options.

11. Rupsha Foods Ltd's year ended 31 December 2025. Ms Chowdhury became Chief Financial Officer on 1 November 2025, and her predecessor has left. She offers to sign representations only for the period from 1 November, saying she lacks knowledge of earlier events. Which statement is correct?

A) The responsibility paragraphs may be dropped for the earlier period, because new management cannot be held responsible for it
B) Representations from 1 November are sufficient, because the standard asks only for matters within the signatory's tenure
C) Only the departed predecessor can give representations on the earlier period, so the auditor must insist on his signature
D) Representations are required for the whole period; she may qualify them as to the best of her knowledge after inquiries

Correct: D difficult ISA 580

Management's responsibility for the financial statements covers all periods reported, whoever held the office. Representations must cover the whole period, and the new officer may give them to the best of her knowledge and belief after inquiring of staff and reviewing records. A narrow period leaves two months of transactions unconfirmed. The predecessor's signature is not the only route, and dropping the responsibility paragraphs would remove representations the auditor must obtain.

12. The group auditor of Padma Holdings Ltd audits consolidated financial statements, and component auditors audit three subsidiaries. Each subsidiary's CFO has signed a letter addressed to the component auditor. Parent management argues these mean no group-level representation letter is needed. How should the group auditor respond?

A) Accept the subsidiary letters together, because consolidation merely aggregates components and equals the group-level representations
B) Request a group letter only if component auditors report misstatements above component materiality, because otherwise none is needed
C) Request a group letter from parent management covering the consolidated statements; component letters are supporting evidence only
D) Request a group letter covering the parent's own statements only, because the subsidiary letters already cover the consolidated work

Correct: C difficult ISA 580

The auditor of consolidated financial statements requests representations from the management responsible for those statements, which is group management, and the letter covers the whole group. Component management's letters support the component work but do not confirm group-level matters such as consolidation adjustments, related parties across the group and group going concern plans. The need for the letter does not depend on whether misstatements are reported.

13. Meghna Cement Ltd engages a practitioner to give limited assurance on the greenhouse gas statement in its sustainability report under ISAE 3000 (Revised). Management argues that written representations are unnecessary because limited assurance requires less evidence. How should the practitioner respond?

A) Request them from the report's intended users, because the practitioner needs confirmation from the people who rely on the report
B) Request them anyway, covering information provided and measurement against the criteria, since it applies to both assurance levels
C) Treat them as optional, because the negative-form conclusion is supported by inquiry and the engagement letter provides enough confirmation
D) Request them only for reasonable assurance, because a positive conclusion needs them and a limited one needs only analytical evidence

Correct: B difficult ISAE 3000 (Revised)

ISAE 3000 (Revised) requires the practitioner to request a written representation from the responsible party that it has provided all relevant information and that the measurement or evaluation of the subject matter against the criteria reflects all relevant matters. This requirement applies to limited and reasonable assurance, because level of assurance changes the extent of other procedures, not the need for representations. They come from the responsible party, not users.

14. Karatoya Plastics Ltd classifies a factory building with a carrying amount of CU 6.5 million as held for sale. Management represents that the board has decided to sell within twelve months. Board minutes record no discussion, no agent is appointed, and management announced similar plans in the two previous years without selling. What should the auditor do?

A) Accept the representation, because intent is within management's knowledge and a signed statement is the only evidence needed for it
B) Accept the representation, because plans announced in earlier years are irrelevant when each year's intention is judged independently
C) Accept the representation if the Chairman also signs it, because a second signatory removes the need to look at board minutes
D) Treat the representation as insufficient alone, weigh management's history, reasons and ability, and challenge the classification

Correct: D difficult ISA 580

Representations about plans or intentions that affect carrying value or classification are requested, but they must be assessed against other evidence. The auditor considers management's history of carrying out stated intentions, its reasons, and its ability to proceed. Here the minutes, the lack of an agent and two years of unfulfilled plans contradict the representation. Intent can be corroborated by documents, so a signed statement alone, even with an extra signatory, cannot support held for sale classification.

15. Padma Textiles Ltd presents complete financial statements for the years ended 30 June 2026 and 2025, and the auditor's report refers to both years. The same auditor obtained a letter for 2025 a year ago. Management proposes a 2026 letter covering only the year ended 30 June 2026, addressed to the shareholders. What is the appropriate response?

A) Accept the 2026-only letter, because the earlier letter remains valid evidence for the comparative year without further confirmation
B) Require the 2025 letter to be re-dated by management to the 2026 report date and accept it as the sole document for both years
C) Accept the 2026-only letter if addressed to the shareholders, because they are the users and the letter then protects the comparatives
D) Require a letter addressed to the auditor covering both years in the report, with prior-year representations reaffirmed

Correct: D difficult ISA 580

A representation letter is addressed to the auditor and must cover all financial statements and periods referred to in the auditor's report. Here that is both years, and current management reaffirms any prior representations that remain relevant. A letter to shareholders is not evidence addressed to the auditor, and an old letter relates to what management knew then. Re-dating a 2025 letter would misstate when the representations were made and omit 2026 matters.

16. The auditor of Savar Textiles Ltd lists the matters on which ISA 580 requires management to give written representations. Which of the following is one of those required matters?

A) That management has received the signed audit report and approves it fully
B) That the accounting policies chosen are the best ones available to the entity
C) That management recorded and reflected all transactions in the statements
D) That the audit fee has been agreed and will be paid within thirty days

Correct: C difficult ISA 580

ISA 580 requires three representations in every audit: that management has fulfilled its responsibility for preparing the financial statements in accordance with the applicable framework, that it has provided the auditor with all relevant information and access, and that it has recorded and reflected all transactions in the financial statements. Confirmation of accounting policies is an additional representation that may be requested, not a mandatory one.

17. The audit team of Bogura Ceramics Ltd is preparing the written representation letter. To whom should the letter be addressed, and who should normally sign it?

A) Addressed to the auditor and signed by senior management
B) Addressed to the shareholders and signed by the engagement partner
C) Addressed to the National Board of Revenue and signed by the company secretary
D) Addressed to the audit committee and signed by the audit senior

Correct: A difficult ISA 580

The written representation letter is provided by management in connection with the audit and is addressed to the auditor, not to the shareholders. Written confirmations are normally required of senior management, and those charged with governance are included where appropriate.

18. The audit report on the financial statements of Gazipur Garments Ltd for the year ended 30 June 2026 will be dated 15 September 2026. Which date is most appropriate for the written representation letter?

A) 30 June 2026, the date of the financial statements
B) 20 September 2026, five days after the date of the report
C) 1 August 2026, the date on which the fieldwork began
D) 14 September 2026, the day before the date of the report

Correct: D complex ISA 580

Written representations are dated as near as possible to, but not after, the date of the auditor's report on the financial statements. A letter dated at the year end or at the start of fieldwork would not cover events up to the report, and a letter dated after the report would be too late to support the opinion.

19. The inventory records of Savar Packaging Ltd were accidentally destroyed in a fire. Management offers a signed written representation confirming the year-end inventory balance. May the auditor treat this as sufficient evidence of the balance?

A) Yes, because a representation signed by the directors is conclusive evidence of the balance
B) No, because representations cannot replace better evidence the auditor would expect to exist
C) Yes, but only if the directors' signatures are witnessed by an independent lawyer
D) Yes, provided the amount of the balance is below performance materiality

Correct: B difficult ISA 580

Written representations cannot be used instead of other, better evidence which the auditors expect to exist. Where the records are missing, the auditor must perform other procedures to obtain evidence and consider the implications for the report. A signature, a witness or a low amount does not turn a representation into sufficient evidence.

20. Management of Natore Sugar Mills Ltd represents in writing that all sales are recorded, but the auditor's testing shows unrecorded sales invoices. What should the auditor do?

A) Perform procedures to resolve it and, if unresolved, reconsider the assessment of management
B) Accept the representation, since management knows the business better than the auditor does
C) Disregard the audit evidence and rely on the representation, because it has been signed by them
D) Withdraw from the engagement at once without performing any further audit procedures at all

Correct: A difficult ISA 580

If written representations are inconsistent with other audit evidence, the auditor performs audit procedures to try to resolve the matter. If it remains unresolved, the auditor reconsiders the assessment of management and determines the effect this may have on the reliability of representations, oral or written, in general. The representation cannot override contradictory evidence.

21. The auditor of Pirojpur Fisheries Ltd has concerns over the integrity and diligence of the owner-manager. What must the auditor determine?

A) Whether more written representations can be obtained to cover each concern raised
B) Whether a specific fraud has been found, as otherwise the concerns can be set aside
C) The effect on the reliability of representations and audit evidence generally
D) Whether the concerns should be reported to the shareholders before work is completed

Correct: C difficult ISA 580

If the auditor has concerns over the competence, integrity, ethical values or diligence of management, the auditor determines the effect that such concerns may have on the reliability of representations, oral and written, and on audit evidence in general. Obtaining more representations from the same management does not resolve doubts about its integrity.

22. Last year Prejudiced plc held obsolete inventory after changing the design of its main product. This year management represents in writing that it has no intention of making similar changes. Which evidence would best corroborate the representation?

A) A second representation on the same point signed by the chairman of the company
B) The minutes of management and board meetings, and any plans for product changes
C) The inventory count sheets from the previous year end prepared by the warehouse staff
D) The bank confirmation of the company's balances at the year end

Correct: B difficult ISA 580

Written representations should be compared with other evidence and their sufficiency assessed. A representation about management's intentions can be corroborated by reviewing minutes of management meetings and plans for product changes, which would show whether any design changes are being considered. A second representation, prior-year counts or a bank confirmation would not test the intention.

23. Which of the following is a written representation required by ISA 240 on fraud?

A) That the auditor is responsible for preventing and detecting fraud within the entity
B) That no fraud exists in any of the entity's suppliers or customers
C) That the audit work performed is sufficient to detect all material fraud in the year
D) That management has disclosed its fraud risk assessment and known or suspected frauds

Correct: D difficult ISA 240

ISA 240 requires management to state that it is responsible for internal controls to prevent and detect fraud, that it has disclosed its assessment of the risk of misstatement from fraud, and that it has disclosed any frauds, actual or suspected, involving management or employees with significant roles in internal control, together with allegations of fraud affecting the financial statements. Responsibility for preventing fraud lies with management, not the auditor.

24. Which written representation does ISA 550 require management to give regarding related parties?

A) It has disclosed the related parties and transactions it knows of, and accounted for them
B) All related party transactions of the entity have been carried out on arm length terms always
C) The related parties have been approved by the auditor before they were accounted for in the books
D) The related party balances have been confirmed directly by the related parties themselves in writing

Correct: A difficult ISA 550

ISA 550 requires management to state that it has disclosed to the auditor the identity of the entity's related parties and all the related party relationships and transactions of which it is aware, and that it has appropriately accounted for and disclosed those relationships and transactions in accordance with the framework. It does not have to assert arm's length terms, and the auditor does not approve related parties.

25. The auditor of Mirpur Pharma Ltd has summarised uncorrected misstatements of CU 120,000 that management declines to correct. What representation does the auditor request under ISA 450?

A) That the auditor agrees that the uncorrected misstatements are immaterial to the statements
B) That management will correct the misstatements in the next financial year of the company
C) That management believes the listed misstatements are immaterial individually and in aggregate
D) That the misstatements arose from fraud by employees and not by the management of the company

Correct: C difficult ISA 450

Under ISA 450 the auditor requests a written representation on whether management believes the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial statements as a whole, with a summary of the items attached to the representation letter. The conclusion on materiality remains the auditor's own, and the representation does not commit management to future corrections.