AUDITOR’S RESPONSIBILITIES AS REGARDS COMPLIANCE OF LAWS AND REGULATIONS Auditing Help

1. When designing audit procedures the auditor should be alert that non compliance of laws regulations may have a material affect on financial statements.
2. The auditor should obtain knowledge of legal and regulatory framework applicable to the entity and the industry in which the entity operates.
3. The auditor should inquire the management if there are any instance of non- compliance.
4. The auditor should inspect correspondence with appropriate regulatory authorities.
5. A written representation should be obtained from management for disclosure of all instances of non-compliance, if any.
6. If non-compliance is detected by the auditor, the auditor should document the facts and discuss with management.
7. The auditor should consider impact of non-disclosure and should consider implications on other representations made by the management.
8. The auditor should communicate non-compliance to the board of directors or audit committee.
9. If the non-compliance has material effect on financial statement the auditor should express qualified or adverse opinion.
10. If the entity does not provide relevant evidence of noncompliance, the auditor should express qualified opinion or a disclaimer.
11. If the entity does not take any remedial action on noncompliance. the auditor may conclude withdrawal from the engagement.

Posted on November 2, 2015 in Consideration of Laws and Regulations in an Audit of Financial Statements

Share the Story

Back to Top