Document ID: chunk:federal_register_of_legislation:F2023C01125:body:0:p4
Version: federal_register_of_legislation:F2023C01125
Segment Type: other
Provision Reference: 
Character Range: 9674–12670

ASA 250

Consideration of Laws and Regulations in an Audit of a Financial Report

Application

Aus 0.1 This Auditing Standard applies to:

 (a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and

 (b) an audit of a financial report, or a complete set of financial statements, for any other purpose.

Aus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.

Operative Date

Aus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2018 with early adoption permitted.  [Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.]

Introduction

Scope of this Auditing Standard

      1. This Auditing Standard deals with the auditor's responsibility to consider laws and regulations in an audit of a financial report.  This Auditing Standard does not apply to other assurance engagements in which the auditor is specifically engaged to test and report separately on compliance with specific laws or regulations.

Effect of Laws and Regulations

    2.                   The effect on a financial report of laws and regulations varies considerably.  Those laws and regulations to which an entity is subject constitute the legal and regulatory framework.  The provisions of some laws or regulations have a direct effect on the financial report in that they determine the reported amounts and disclosures in an entity's financial report.  Other laws or regulations are to be complied with by management or set the provisions under which the entity is allowed to conduct its business but do not have a direct effect on an entity's financial report.  Some entities operate in heavily regulated industries (such as banks and chemical companies).  Others are subject only to the many laws and regulations that relate generally to the operating aspects of the business (such as those related to occupational safety and health, and equal employment opportunity).  Non‑compliance with laws and regulations may result in fines, litigation or other consequences for the entity that may have a material effect on the financial report.

Responsibility for Compliance with Laws and Regulations (Ref: Para. A1–A8)

    3.                   It is the responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations, including compliance with the provisions of laws and regulations that determine the reported amounts and disclosures in an entity's financial report.

Responsibility of the Auditor

    4.                   The requirements in this Auditing Standard are designed to assist the auditor in identifying material misstatement of the financial report due to non‑compliance with laws and regulations.  However,