Auditing and Assurance Standards and Guidance

Auditing Standards (Ireland)

A7.	To obtain a general understanding of the legal and regulatory framework, and how the entity complies with that framework, the auditor may, for example:

Use the auditor's existing understanding of the entity's industry, regulatory and other external factors;

Update the understanding of those laws and regulations that directly determine the reported amounts and disclosures in the financial statements;

Inquire of management as to other laws or regulations that may be expected to have a fundamental effect on the operations of the entity;

Inquire of management concerning the entity's policies and procedures regarding compliance with laws and regulations; and

Inquire of management regarding the policies or procedures adopted for identifying, evaluating and accounting for litigation claims.