Wiley Practitioner's Guide to GAAS 2022

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 ...