Wiley Practitioner's Guide to GAAS 2020

6AU-C 250 Consideration of Laws and Regulations in an Audit of Financial Statements

Scope

Definition of Term

Objectives of AU-C Section 250

Requirements

Management’s Responsibilities

Auditor’s Responsibilities

Categories of Laws and Regulations

Audit Procedures

Response to Identified or Suspected Noncompliance with Laws and Regulations

Evaluation of Detected or Suspected Noncompliance with Laws and Regulations

Reporting Identified or Suspected Noncompliance

Documentation

SCOPE

AU-C 250 applies to an audit of financial statements. It does not apply to assurance engagements specifically to test and report separately on compliance with specific laws or regulations. (AU-C 250.01)

DEFINITION OF TERM

Source: AU-C 250.11. For the definition related to this standard, see Appendix A, “Definitions of Terms”: Noncompliance.

OBJECTIVES OF AU-C SECTION 250

AU-C Section 250.10 states that:

The objectives of the auditor are to

1. obtain sufficient appropriate audit evidence regarding material amounts and disclosures in the financial statements that are determined by the provisions of those laws and regulations generally recognized to have a direct effect on their determination (see paragraph .06a),
2. perform specified audit procedures that may identify instances of noncompliance with other laws and regulations that may have a material effect on the financial statements (see paragraph .06b), and
3. respond appropriately to noncompliance or suspected noncompliance with laws and regulations identified ...