1.

To the BOD and senior management

 When the entity does not take
the remedial action that the
auditor considers necessary in
the circumstances
 On receipt of an inquiry from
the proposed auditor, the
existing auditor should advice
whether there are any
professional reasons why the
proposed auditor should not
accept the appointment
2. To the next higher level of authority e.g
audit committee, supervisory board (when
To Management
1. Is believed to be involved)
Withdrawal from
Qualified or Adverse Opinion-
the Engagement noncompliance has material effect and
To the Usrs of the
The Auditor’s Consideration has not been properly reflected on FS
of Compliance with Laws Report on on FS
Qualified opinion or disclaimer- auditor
and Regulations precluded by entity form obtaining
sufficient evidence
To the The auditor may need
Regulatory to seek legal advice in
Report on Noncompliance and such circumstances,
Enforcemnt giving due
consideration to the
Authorities
auditor’s responsibility
to the public interest

PSA  Ensure that entity’s operations are conducted

in accordance with laws and regulations;
prevention and detection of noncompliance

250  Policies and procedures, among others, that

may assist managers in:
Responsibility of
Management for Compliance
with Laws and Regulations
o Monitoring legal requirements
o Instituting and operating appropriate
systems of control
o Developing, publicizing and following
Code of Conduct
o Monitoring compliance and discipline
with the Code of Conduct
o Engaging legal advisers to assist in
monitoring legal requirements
o Maintain and comply a register of
significant law