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Hi Kim
I am getting a little confused with ISA 250
L & R having a direct effect and indirect effect .. I am not able to understand this ? Can you help by some exmaples please“Direct” means that they determine the amounts and disclosure that will be reported in the financial statements. E.g. you may know from LW-ENG that the Companies Act 2016 requires lots of specific disclosures relating to directors (remuneration, loans, transactions, etc).
“Indirect” includes those that regulate the industry in which the company operates (e.g. financial services) and those that regulate the operating aspects of the company – e.g. health and safety and environmental legislation and regulations. If failure to comply with these could result in fines and penalties (actual liabilities) or legal claims being brought against the company (actual or contingent liabilities) these affect the financial statement (indirectly).
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