Document ID: chunk:federal_register_of_legislation:F2023C01125:body:0:p15
Version: federal_register_of_legislation:F2023C01125
Segment Type: other
Provision Reference: 
Character Range: 41852–44944

may specifically prohibit a communication, or other action, that might prejudice an investigation by an appropriate authority into an actual, or suspected, illegal act, including alerting the entity, for example, when the auditor is required to report the identified or suspected non‑compliance to an appropriate authority pursuant to anti‑money laundering legislation.  In these circumstances, the issues considered by the auditor may be complex and the auditor may consider it appropriate to obtain legal advice.

A22.         If management or, as appropriate, those charged with governance, do not provide sufficient information to the auditor that the entity is in fact in compliance with laws and regulations, the auditor may consider it appropriate to consult with the entity's in‑house or external legal counsel about the application of the laws and regulations to the circumstances, including the possibility of fraud, and the possible effects on the financial report.  If it is not considered appropriate to consult with the entity's legal counsel or if the auditor is not satisfied with the legal counsel's opinion, the auditor may consider it appropriate to consult on a confidential basis with others within the firm, a network firm, a professional body, or with the auditor's legal counsel as to whether a contravention of a law or regulation is involved, including the possibility of fraud, the possible legal consequences, and what further action, if any, the auditor would take.

Evaluating the Implications of Identified or Suspected Non‑Compliance (Ref: Para. 22)

A23.         As required by paragraph 22, the auditor evaluates the implications of identified or suspected non‑compliance in relation to other aspects of the audit, including the auditor's risk assessment and the reliability of written representations.  The implications of particular identified or suspected non‑compliance will depend on the relationship of the perpetration and concealment, if any, of the act to specific controls and the level of management or individuals working for, or under the direction of, the entity involved, especially implications arising from the involvement of the highest authority within the entity.  As noted in paragraph 9, the auditor's compliance with law, regulation or relevant ethical requirements may provide further information that is relevant to the auditor's responsibilities in accordance with paragraph 22.

A24.         Examples of circumstances that may cause the auditor to evaluate the implications of identified or suspected non‑compliance on the reliability of written representations received from management and, where applicable, those charged with governance include when:

           * The auditor suspects or has evidence of the involvement or intended involvement of management and, where applicable, those charged with governance, in any identified or suspected non‑compliance.

           * The auditor is aware that management and, where applicable, those charged with governance. have knowledge of such non‑compliance and, contrary to legal or