ISA 250: Consideration of laws and regulations in an audit of financial statements.


Mind Map on ISA 250: Consideration of laws and regulations in an audit of financial statements., created by littlepaz_2001 on 08/05/2013.
Mind Map by littlepaz_2001, updated more than 1 year ago
Created by littlepaz_2001 about 10 years ago

Resource summary

ISA 250: Consideration of laws and regulations in an audit of financial statements.
  1. Responsibility of management
    1. To ensure operations are conducted in accordance with laws & regulations
    2. Responsibility of the auditor
      1. The auditor is not and cannot be held responsible for preventing non compliance.
        1. There is unavoidable risk that some material mistatements go undetected.
          1. Conduct designed to conceal:- collusion, forgery, deliberate failure to record a transaction.
      2. Objective of the auditor
        1. Obtain sufficient appropriate audit evidence regarding compliance.
          1. Perform specified audit procedures to help identify instances of non compliance.
            1. Respond appropriately to non-compliance or suspected non compliance.
        2. Auditor's consideration of compliance
          1. Obtain an understanding of the legal & regulatory framework applicable to the entity and the industry or sector in which they operate.
            1. How the entity is complying with that framework.
              1. Inquiring with management whether the entity is compliant.
                1. Inspecting correspondence, reading minutes.
                2. Ask management to provide written representation.
                3. Existing understanding
                  1. Update the understanding
                    1. Enquire of management
              2. Audit procedures when non compliance is identified.
                1. Understanding of the nature of the act and the circumstances in which it has occurred.
                  1. Further information to evaluate the possible effect on the FS's
                    1. Potential financial consequences
                      1. Disclosure
                        1. Fair presentation
                          1. If sufficient information cannot be obtained, evaluate the lack of sufficient appropriate audit evidence on the auditor's opinion.
                            1. Reliability of written representations.
                      2. Reporting suspected non-compliance.
                        1. Those charged with governance
                          1. As soon as practicable.
                          2. Users of the audit report.
                            1. Material & effects the FS's- Express a qualified or an adverse opinion.
                              1. Lack of sufficient appropriate audit evidence - Qualified or disclaim an opinion due to limitation of scope.
                          3. Withdrawal may be the only option if the entity does not take the remedial action the auditor thinks is necessary.
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