Module 16

Question 1

Laws and regulations ISA

Answer 1

ISA 250A

Question 2

Ways auditor can obtain understanding of legal and regulatory framework (3)

Answer 2

• Discussions with management
• Enquiries with head of legal/ general counsel
• Reading other information in annual report

Question 3

Auditor responsibility over entity’s policies relating to compliance with laws and regulations, ethical behaviour and whistleblowing

Answer 3

Must assess the design and implementation of controls

Question 4

Where the controls over the identification of related-party transactions and balances are expected to be effective, auditor may (2)

Answer 4

• Test whether controls are operating effectively

- Perform substantive analytical review of the transactions and balances

Question 5

ISA 550 (related parties) requires auditor to (3)

Answer 5

• Obtain written representations that management have disclosed and accounted for all relevant related party relationships and transactions
• To communicate with TCWG any significant matters in relation to related parties
• To document the names of identified related parties and the nature of related party relationships

Question 6

Overall RoMM relating to estimates will include one or more of the following (3)

Answer 6

• Obtaining evidence from events occurring up to date of auditors report
• Testing how management made accounting estimate
• Developing the auditor’s point estimate or auditor’s range of estimates

Question 7

ISA for management’s expert

Answer 7

ISA 500