Document ID: chunk:federal_register_of_legislation:F2023C01125:body:0:p7
Version: federal_register_of_legislation:F2023C01125
Segment Type: other
Provision Reference: 
Character Range: 18351–21684

identify instances of non‑compliance with other laws and regulations that may have a material effect on the financial report; and

         (c)                To respond appropriately to identified or suspected non‑compliance with laws and regulations identified during the audit.

Definition

    12.               For the purposes of this Auditing Standard, the following term has the meaning attributed below:

    Non‑compliance – Acts of omission or commission, intentional or unintentional, committed by the entity, or by those charged with governance, by management or by other individuals working for or under the direction of the entity, which are contrary to the prevailing laws or regulations.  Non‑compliance does not include personal misconduct unrelated to the business activities of the entity.  (Ref: Para. A9–A10)

Requirements

The Auditor's Consideration of Compliance with Laws and Regulations

    13.               As part of obtaining an understanding of the entity and its environment in accordance with ASA 315,[4] the auditor shall obtain a general understanding of:

(a)                The legal and regulatory framework applicable to the entity and the industry or sector in which the entity operates; and

(b)                 How the entity is complying with that framework.  (Ref: Para. A11)

    14.               The auditor shall obtain sufficient appropriate audit evidence regarding compliance with the provisions of those laws and regulations generally recognised to have a direct effect on the determination of material amounts and disclosures in the financial report.  (Ref: Para. A12)

    15.               The auditor shall perform the following audit procedures to help identify instances of non‑compliance with other laws and regulations that may have a material effect on the financial report: (Ref: Para. A13–A14)

         (a)                Enquiring of management and, where appropriate, those charged with governance, as to whether the entity is in compliance with such laws and regulations; and

         (b)                Inspecting correspondence, if any, with the relevant licensing or regulatory authorities.

    16.               During the audit, the auditor shall remain alert to the possibility that other audit procedures applied may bring instances of non‑compliance or suspected non‑compliance with laws and regulations to the auditor's attention.  (Ref: Para. A15)

    17.               The auditor shall request management and, where appropriate, those charged with governance, to provide written representations that all known instances of non‑compliance or suspected non‑compliance with laws and regulations whose effects should be considered when preparing the financial report have been disclosed to the auditor.  (Ref: Para. A16)

    18.               In the absence of identified or suspected non‑compliance, the auditor is not required to perform audit procedures regarding the entity's compliance with laws and regulations, other than those set out in paragraphs 13–17.

Audit Procedures When Non‑Compliance Is Identified or Suspected

    19.               If the auditor becomes aware of information concerning an instance of non‑compliance or suspected non‑compliance with laws and regulations, the auditor shall obtain: (Ref: Para. A17–A18)

         (a)