Consideration of Laws and Regulations in an Audit of ... - ISSAI

More documents

Recommendations

Info

ISSAI 1250ISA 250CONSIDERATION OF LAWS AND REGULATIONSIN AN AUDIT OF FINANCIAL STATEMENTSInternational Standard on Auditing (ISA) 250, “Consideration of Laws andRegulations in an Audit of Financial Statements” should be read in conjunctionwith ISA 200 “Overall Objectives of the Independent Auditor and the Conduct ofan Audit in Accordance with International Standards on Auditing.”3292 Consideration of Laws and Regulations in an Audit of Financial Statements
ISSAI 1250ISA 250IntroductionScope of this ISACONSIDERATION OF LAWS AND REGULATIONSIN AN AUDIT OF FINANCIAL STATEMENTS1. This International Standard on Auditing (ISA) deals with the auditor’sresponsibility to consider laws and regulations in an audit of financialstatements. This ISA does not apply to other assurance engagements inwhich the auditor is specifically engaged to test and report separately oncompliance with specific laws or regulations.Effect of Laws and Regulations2. The effect on financial statements of laws and regulations variesconsiderably. Those laws and regulations to which an entity is subjectconstitute the legal and regulatory framework. The provisions of some lawsor regulations have a direct effect on the financial statements in that theydetermine the reported amounts and disclosures in an entity’s financialstatements. Other laws or regulations are to be complied with bymanagement or set the provisions under which the entity is allowed toconduct its business but do not have a direct effect on an entity’s financialstatements. Some entities operate in heavily regulated industries (such asbanks and chemical companies). Others are subject only to the many lawsand regulations that relate generally to the operating aspects of the business(such as those related to occupational safety and health, and equalemployment opportunity). Non-compliance with laws and regulations mayresult in fines, litigation or other consequences for the entity that may havea material effect on the financial statements.Responsibility for Compliance with Laws and Regulations (Ref: Para. A1-A6)3. It is the responsibility of management, with the oversight of those chargedwith governance, to ensure that the entity’s operations are conducted inaccordance with the provisions of laws and regulations, includingcompliance with the provisions of laws and regulations that determine thereported amounts and disclosures in an entity’s financial statements.Responsibility of the Auditor4. The requirements in this ISA are designed to assist the auditor in identifyingmaterial misstatement of the financial statements due to non-compliancewith laws and regulations. However, the auditor is not responsible forpreventing non-compliance and cannot be expected to detect noncompliancewith all laws and regulations.5. The auditor is responsible for obtaining reasonable assurance that thefinancial statements, taken as a whole, are free from material misstatement,4Consideration of Laws and Regulations in an Audit of Financial Statements 293
Page 2: ISSAI 1250INTOSAI Professional Stan
Page 5 and 6: ISSAI 1250practice note 250Practice
Page 7 and 8: ISSAI 1250practice note 250Reportin
Page 9 and 10: InternationalAuditing andAssuranceS
Page 11: ISSAI 1250ISA 250IntroductionINTERN
Page 15 and 16: ISSAI 1250ISA 250CONSIDERATION OF L

Consideration of Laws and Regulations in an Audit of ... - ISSAI

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?