- This topic has 2 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
Hi Sir
When management impose a limitation of scope, and refuse to remove it, even after consultation and reports to those charged with governance – the auditor would attempt to resign unless prohibited by laws or regulations?
The same can’t be said when the management team refuse to provide written representation can it?
If management refuse to provide representation relating to their responsibilities then a disclaimer of opinion is issued, but the auditor does not resign?
If, however, we’re given a scenario where management refuse to provide specific representations, for example, relating to accounting estimates, then the auditor may decide to provide a qualified opinion if the affected balance/transaction can be isolated and does not undercut the reliance, which can be placed on the remainder of the financial statements?
Thank you.
Refusal to provide a letter of representation will lead to a disclaimer and then probably resignation before next audit. Why would you stay?
If a specific item is not included in letter of representation, qualification might be possible but auditors would be unhappy and suspicious. In matters of judgement/accounting estimates all the directors have to say is that an amount is stated as x to the best of their knowledge and belief, eg on inventory values. They are not giving a guarantee. No one can with estimates.
- The topic ‘Accounting Estimates’ is closed to new replies.