| 12. | As part of obtaining an understanding of the entity and its environment in accordance with ISA (UK and Ireland) 315,4 the auditor shall obtain a general understanding of: |
| (a) | The legal and regulatory framework applicable to the entity and the industry or sector in which the entity operates; and |
| (b) | How the entity is complying with that framework. (Ref: Para. A7) |
| 13. | The auditor shall obtain sufficient appropriate audit evidence regarding compliance with the provisions of those laws and regulations generally recognized to have a direct effect on the determination of material amounts and disclosures in the financial statements. (Ref: Para. A8 – A8–1) |
| 14. | The auditor shall perform the following audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements: (Ref: Para. A9 – A10–1) |
| (a) | Inquiring of management and, where appropriate, those charged with governance, as to whether the entity is in compliance with such laws and regulations; and |
| (b) | Inspecting correspondence, if any, with the relevant licensing or regulatory authorities. |
| 15. | During the audit, the auditor shall remain alert to the possibility that other audit procedures applied may bring instances of non-compliance or suspected non-compliance with laws and regulations to the auditor's attention. (Ref: Para. A11 – A11–2) |
| 16. | The auditor shall request management and, where appropriate, those charged with governance to provide written representations that all known instances of non-compliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements have been disclosed to the auditor. (Ref: Para. A12) |
| 17. | In the absence of identified or suspected non-compliance, the auditor is not required to perform audit procedures regarding the entity's compliance with laws and regulations, other than those set out in paragraphs 12–16. |
| 4 ISA (UK and Ireland) 315, "Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment," paragraph 11. |
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