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PSA-580 - Auditing Standards and Practices Council...

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Philippine Standard on Auditing 580 MANAGEMENT REPRESENTATIONS Auditing Standards and Practices Council
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PSA 580 PHILIPPINE STANDARD ON AUDITING 580 MANAGEMENT REPRESENTATIONS CONTENTS Paragraph Introduction 1-2 Acknowledgment by Management of its Responsibility for the Financial Statements 3 Representations by Management as Audit Evidence 4-9 Documentation of Representation by Management 10-14 Action if Management Refuses to Provide Representations 15 Effective Date 16-17 Acknowledgment 18-19 Appendix: Example of a Management Representation Letter Philippine Standards on Auditing (PSAs) are to be applied in the audit of financial statements. PSAs are also to be applied, adapted as necessary, to the audit of other information and to related services. PSAs contain the basic principles and essential procedures (identified in bold type black lettering) together with related guidance in the form of explanatory and other material. The basic principles and essential procedures are to be interpreted in the context of the explanatory and other material that provide guidance for their application. To understand and apply the basic principles and essential procedures together with the related guidance, it is necessary to consider the whole text of the PSA including explanatory and other material contained in the PSA not just that text which is black lettered. In exceptional circumstances, an auditor may judge it necessary to depart from a PSA in order to more effectively achieve the objective of an audit. When such a situation arises, the auditor should be prepared to justify the departure. PSAs need only be applied to material matters.
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PSA 580 The PSAs issued by the Auditing Standards and Practices Council (Council) are based on International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (formerly International Auditing Practices Committee) of the International Federation of Accountants. The ISAs on which the PSAs are based are generally applicable to the public sector, including government business enterprises. However, the applicability of the equivalent PSAs on Philippine public sector entities has not been addressed by the Council. It is the understanding of the Council that this matter will be addressed by the Commission on Audit itself in due course. Accordingly, the Public Sector Perspective set out at the end of an ISA has not been adopted into the PSAs. Deleted:
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PSA 580 Introduction 1. The purpose of this Philippine Standard on Auditing (PSA) is to establish standards and provide guidance on the use of management representations as audit evidence, the procedures to be applied in evaluating and documenting management representations and the action to be taken if management refuses to provide appropriate representations.
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