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Hi,
my understanding is that auditors are not responsible for non-compliance with law and regulations, management is.
Auditors have responsibilities when a non-compliance may result in a material amount to be misstated. Is my understanding correct?Kind regards,
Thank you
Salvatore
Generally you are right.
There are some laws where auditors have a legal duty to report breaches (eg anti money laundering laws in the UK), but auditors responsibilities are primarily foxussed in the FS and whether a breach of law affects thlse materially.
Hi again,
Could you please make an example of non-compliance having a direct effect on the determination of material amounts and one for a non-compliance that does not have a direct effect on the determination of material amounts?
BR
Thanks a lot
Salvatore
For a direct effect non-compliance with tax legislation so that the tax is wrong in the FS.
Non-direct could be non-compliance with a law that had little financial implications, such as fines for non-compliance. Eg if a director’s appointment had not been correctly carried out.
Non-direct, could it be also a fine for a non-compliance to some hygiene regulations?
thanks a lot for your help
🙂
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