Final Chapter 1 Revised 2015

7/25/2019 Final Chapter 1 Revised 2015

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CHAPTER 1

INTERNATIONAL REGULATORYENVIRONMENTS FOR AUDIT AND

ASSURANCE SERVICES

International regulatory frameworks for audit andassurance servicesAudit committeesInternal control effectivenessMoney launderingaws and regulations


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E!AM C"#TE!T

T$is c$a%ter is likely to &e im%ortant in t$e e'am(%articularly money laundering w$ic$ was covered in t$e%ilot %a%er from &ot$ a discussion and %ractical conte't)

A *uestion re*uiring a definition of money laundering andits im%act on a s%ecific engagement was included for +marks in t$e ,ecem&er -..7 e'am) /uestion + 0&asked for t$e &enefits of an audit to a small com%any for2 marks 3 t$is would $ave &een a revision of a related

to%ic covered on 45 Audit 6 Assurance) T$e tec$nical content of t$is %art of t$e sylla&us ismainly drawn from your earlier studies) /uestions in t$is%a%er are unlikely to ask for straig$t re%etition of t$isknowledge( &ut rat$er to re*uire e'%lanation ordiscussion of t$e reasons &e$ind t$e regulations)


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4P7 ACCA

T$e need for laws( regulations(

standards and ot$er guidance

Cor%orate scandals( suc$ as Enron and orldcom in t$e89A( and Parmalat in Italy $ave &roug$t t$e audit

%rofession under close scrutiny from investors(&usinesses( regulators and ot$ers)

:usinesses $ave &ecome more com%le' and glo&al( andfirms of accountants $ave e'%anded t$eir range of

services well &eyond traditional assurance and ta'advice) T$is $as led to a great deal of re;e'amination ofregulatory and standard;setting structures &ot$ nationallyand internationally in recent years)


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Enron

"ne of &iggest &ankru%tcy 3 -..1

"ne of &iggest energy grou%s wit$ revenues over < +..&ns and =.(... em%loyees around t$e world

1>>.;1>>> stock %rice was rising steadily to


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Enron

4inancial re%orting irregularities 1>>7;-...) A num&er ofs%ecial;%ur%ose entities 0owned &y t$e rou% wascreated) :ig loans on 9PBs) T$e structure of 9PBs was

so com%le' to avoid &e consolidated 0auditors did notfind out it)

In t$is way de&t levels of Enron were ke%t low 3 off&alance s$eet de&t

Earning overstated

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orldcom

9tart as small tele%$one com%any 3 e'%ansion %rogramt$roug$ ac*uisitions of ot$er com%anies 3 enter intelecommunication sector 0internet

4iled for &ankru%tcy in uly -..-

Accounting irregularities 0misclassification of ca%itale'%enditure

CE" was c$arged wit$ fraud and making false statementin connection wit$ accounting irregularities t$at led toorldCom?s colla%se

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Parmalat

4ounded in 1>D- in Parma Italy

4ocus on milk and diary %roducts

In decade to -..=( Parmalat $ad e'%eriencedremarka&le growt$ wit$ sales from 52+ millionsin 1>>- to 1(D &illions in -..-

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Parmalat Calisto TanFi C$airman and CE"

1>>. 9on of Calisto TanFi &oug$t Parma 4C 3 su&stantialin@ection of resources allowed Parma to get very strongteam

,aug$ter of Calisto TanFi 3 created Parmatour) 9u&stantialresources were diverted from Parmalat to Parmatour

Calisto TanFi 3 %restige G &oug$t television station for t$eParmalat rou%

9%onsor of #iki auda 041 %ilot

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Parmalat Com%licated organisational structure including 17. su&sidiaries

9u&stantial funds were moved &etween t$ese su&sidiaries someof w$ic$ registered in Cayman Islands

4or instance( :onlat ( su&sidiary registered in Cayman Islands(was su%%osed to $eld =)>+ &illions in :ank of America accountin t$e #ew ork) In ,ec -..=( revealed t$at :onlat %rovidedfalse documentation a&out t$e asset to its auditors( rantT$ornton)

Accused rant T$ornton t$at involved in setting u% of offs$orecom%anies in Cari&&ean t$at allowed TanFi to mani%ulate fundsand $ide grou%?s true financial %osition)

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International Regulatory framework

T$e international regulatory framework foraudit and assurance services

encom%asses Pronouncements &y I4AC w$ic$ is t$e

worldwide organisation for accounting%rofession

Internal controls ; im%lications for auditors


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International standard setting International 9tandards on Auditing are %roduced &y t$e

International Auditing and Assurance 9tandards :oard0IAA9:( a tec$nical standing committee of t$eInternational 4ederation of Accountants 0I4AC)

T$e mission of I4AC as set out in its constitution JT$edevelo%ment and en$ancement of an accountancy%rofession wit$ $armonised standards a&le to %rovideservices of consistently $ig$ *uality in t$e %u&lic interestJ)

Muc$ of %ronouncements and %rinci%les are em&odied int$e law of many @urisdictions)

4or e'am%le in t$e 8K( auditor must &e a mem&er ofLrecognised su%ervisory &ody? and audits s$ould &e carriedout in accordance wit$ International 9tandards of Auditing0I9As


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"verview of 8K standard setting

9tandards of Auditing in t$e 8K are issued&y t$e 8K Auditing Practices :oard( %art

of t$e 4inancial Re%orting Council( &asedon t$e international ones wit$ additional8K;s%ecific guidance w$ere desira&le)

T$e AP: $as not yet ado%ted t$e IAA9:JsIAP9s( I9REs( I9AEs or I9R9s)


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Pu&lic oversig$t internationally

In 4e&ruary -..+ t$e Public Interest Oversigt !"#r$was launc$ed to e'ercise oversig$t for all of I4AC?sJ%u&lic interest activitiesJ including its standard;setting

&odies suc$ as t$e IAA9:) Its work involves Monitoring t$e standard;setting &oards "verseeing t$e nomination %rocess for

mem&ers$i% of t$ese &oards Co;o%eration wit$ national oversig$t aut$orities)

T$e o&@ective of t$e international PI": is to increase t$econfidence of investors and ot$ers t$at t$e %u&licinterest activities of I4AC are %ro%erly res%onsive to t$e%u&lic interest)


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"t$er e'am%les of %u&lic oversig$t

In t$e 8K( t$e Professional "versig$t :oard0P": of t$e 4RC( is a regulatory &ody w$ose aimis to %rovide assurance t$at t$e %rofessionalaccountancy &odies in t$e 8K are %ro%erly setting

standards and enforcing disci%line for t$eirmem&ers in accordance wit$ 8K;s%ecificcom%anies legislation and ot$er statutoryre*uirements)


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"t$er e'am%les of %u&lic oversig$t

In t$e 89A( t$e Pu&lic Com%any Accounting :oard 0PCA":is a %rivate sector &ody created &y t$e 9ar&anes;"'ley Act(-..-)

Its aim is to oversee t$e auditors of %u&lic com%anies) Itsstated %ur%ose is to L%rotect t$e interests of investors andfurt$er t$e %u&lic interest in t$e %re%aration of informative(fair and inde%endent audit re%orts?)

Its %owers include setting auditing( *uality control( et$ics(inde%endence and ot$er standards relating to t$e

%re%aration of audit re%orts &y issuers) It also $as t$eaut$ority to regulate t$e non;audit services t$at audit firmscan offer 3 t$is %ower was awarded to it as a result of t$eEnron and orldcom scandals)


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Au$it c"%%itteesCom&ined Code %rovisions

T$e &oard would esta&lis$ an audit committee of at least t$reemem&ers) T$e main role and res%onsi&ilities s$ould &e set outin written terms of reference and s$ould include

0a To monitor t$e integrity of t$e financial statements of t$ecom%any( reviewing significant financial re%orting issues and@udgments contained in t$em

0& To review t$e com%anyJs internal financial controls and(unless e'%ressly addressed &y a se%arate &oard risk

committee com%osed of inde%endent directors or &y t$e &oarditself( t$e com%anyJs control and risk management systems

0c To monitor and review t$e effectiveness of t$e com%anyJsinternal audit function)


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Au$it c"%%ittees0d To make recommendations to t$e &oard for it to %ut

to t$e s$are$olders for t$eir a%%roval in generalmeeting in relation to t$e a%%ointment of t$e e'ternalauditor and to a%%rove t$e remuneration and termsof engagement of t$e e'ternal auditors

0e To monitor and review t$e e'ternal auditorJsinde%endence( o&@ectivity and effectiveness( takinginto consideration relevant 8K %rofessional andregulatory re*uirements regarding audit and non;

audit services offered &y t$e auditors

T$e audit committee s$ould &e %rovided wit$su&&icient res"urces to undertake its duties)


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Advantages and disadvantagesAdvantages Increased confidence in credi&ility of re%orting 4rees e'ecutive directors to manage

"ffers t$e e'ternal auditors a direct link wit$non;e'ecutive directors Creates culture o%%osed to fraud

,isadvantages 9electing suita&le inde%endent non;e'ecutive

directors can &e difficult Cost of audit committee


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ink &etween non e'ecutive

directors and e'ternal auditors ,iscuss %rior t$e audit matters suc$ as 9co%e of audit Role of internal auditors Audit fees And after t$e audit Control environment and weaknesses identified Any differences of o%inion &etween t$e auditors and t$e

management and $ow t$ese $ave &een resolved 9ignificant ad@ustments made


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Internal control effectiveness Internal control is a key %art of good cor%orategovernance) ,irectors are res%onsi&le formaintaining a system of control t$at will contri&uteto

9afeguarding t$e com%anyJs assets

Hel%ing to %revent and detect fraud

9afeguarding t$e s$are$oldersJ investment

ood internal control $el%s t$e &usiness to runefficiently) A control system reduces identified risksto t$e &usiness) It also $el%s to ensure relia&ility ofre%orting and com%liance wit$ laws)


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,irectors res%onsi&ilities

It is t$e directors? res%onsi&ility to im%lement andmaintain an a%%ro%riate system of internal controls)

Auditors s$ould not take any e'ecutive role in t$is area)

Instead t$eir res%onsi&ility is to review t$e controls as%art of t$eir audit work and decide w$et$er any reliancecan &e %laced on t$em)

T$e Com&ined Code recommends t$at t$e &oard ofdirectors re'"rts on its review of internal controls as %art

of t$e annual re%ort) T$e statement s$ould &e &ased onan annual assessment of internal control w$ic$ s$ouldconfirm t$at t$e &oard $as considered #ll signi&ic#nt#s'ects of internal control)


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Auditors res%onsi&ilities

T$e guidance states t$at t$e auditors s$ould concentrateon t$e review carried out &y t$e &oard) T$e o&@ective oft$e auditorsJ work is to assess w$et$er t$e com%anyJs

summary of t$e %rocess t$at t$e &oard $as ado%ted inreviewing t$e effectiveness of t$e system of internalcontrol is su%%orted &y t$e documentation %re%ared &yt$e directors and reflects t$at %rocess)

T$e auditors s$ould make a%%ro%riate en*uiries andreview t$e statement made &y t$e &oard in t$e accountsand t$e su%%orting documentation)


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Auditors may re%ort

T$e auditors may re%ort &y e'ce%tion if T$e &oard?s summary of t$e %rocess of

review of internal controls is not su%%orted T$e &oard $as not made an a%%ro%riate

disclosure if it $as failed to conduct an

annual review( or t$at disclosure made isnot consistent wit$ t$e auditors?understanding


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Auditors re%ort

T$e re%ort s$ould &e included in a se%arate %aragra%$&elow t$e o%inion %aragra%$) T$e :ulletin gives t$efollowing e'am%le

Oter %#tter e $ave reviewed t$e &oardJs descri%tion of its %rocess

for reviewing t$e effectiveness of internal control set outon %age ' of t$e annual re%ort) In our o%inion t$e &oardscomments concerning ))) do not a%%ro%riately reflect ourunderstanding of t$e %rocess undertaken &y t$e &oard&ecause)))


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Money aundering

,efinition Money laundering is t$e 'r"cess &y w$ic$

criminals attem%t to c"nce#l te true"rigin and owners$i% of te 'r"cee$s "&teir cri%in#l #ctivit(( allowing t$em tomaintain control over t$e %roceeds and(ultimately( %roviding a cover for t$eirsources of income)


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International recommendations An inter;governmental &ody( t$e 4inancial Action Task 4orce

on Money aundering 04AT4 was esta&lis$ed to setstandards and develo% %olicies to com&at money launderingand terrorist financing)

In 1>>.( 4AT4 issued recommendations for governments on$ow to com&at t$ese offences and t$ese recommendations$ave now &een endorsed &y more t$an 1=. countries)

Customer due diligence Re%orting sus%icious transactions International coo%eration Make money laundering criminal offence


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Criminal offences

Possessing( dealing wit$ or concealing t$e%roceeds of any crime 0%roceeds from ta'evasion( &ri&ery

Attem%ting and assisting to commit moneylaundering

4ailure of an individual in t$e regulated sector tore%ort a sus%icion of money laundering

,oing or disclosing somet$ing t$at may%re@udice an investigation in suc$ activities0Ti%%ing;off


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Penalties and risks

Im%risonment 8nlimited fine oss of aut$ority to conduct &usiness Adverse %u&licity G loss of re%utation

,E4E#CE9 a re%ort &eing made to a%%ro%riate aut$ority or t$e

MR" t$at it was t$e intention to make a re%ort &ut t$ere was areasona&le e'cuse for not $aving done so

Jreasona&le e'cuseJ is likely to encom%ass t$e fear of%$ysical violence


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ACCA 8I,A#CE1) A%%oint an MLRO (Money Laundering Reporting Officer) and

im%lement internal re%orting %rocedures-) Esta&lis$ internal controls and %olicies a%%ro%riate to %revent

money laundering( and make relevant individuals aware oft$e %rocedures

=) Train individuals to ensure t$at t$ey are aware of t$e relevantlegislation( know $ow to recognise and deal wit$ %otentialmoney laundering, $ow to re%ort sus%icions to t$e MLRO(and $ow to identify clients

2) Berify t$e identity of new and e'isting clients and maintainevidence of identification 0ie customer due diligencemeasures

+) Esta&lis$ record kee%ing system for all transactionsD) Re%ort sus%icions of money laundering to relevant aut$ority


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ACCA 8I,A#CE

A%%oint an MLRO:

T$e MR" s$ould $ave a suita&le level of

seniority and e'%erience) Individuals s$ould make internal re%orts of

money laundering to MR")

T$e MR" must consider w$et$er to re%ort torelevant aut$ority and document t$e %rocess)

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ACCA 8I,A#CE

Audit firm should establish policies that cover:client acce%tance

gat$ering Jknow your clientJ 0KC information controls over client money and transactionst$roug$ t$e client account

advice and services to clients t$at could &e ofuse to a money launderer

internal re%orting linest$e role of t$e MR"


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Client i$enti&ic#ti"n T$e re*uirement to verify t$e identities of all

clients is mandatory) Berification must &edocumented &efore any work is

undertaken) 9ufficient knowledge of a clientmust &e maintained to &e a&le to identifyt$at w$ic$ is unusual andGor sus%icious)

$o is t$e client( w$o controls( %ur%ose of &usinessrelations$i%( nature of client( client?s sources of funds


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34P7 ACCA

T('ic#l i$enti&ic#ti"n 'r"ce$ures

4or an individual ; o&taining official documents(wit$ a %$otogra%$( w$ic$ esta&lis$ t$e clientJsfull name and %ermanent address 0eg a drivinglicense or %ass%ort su%%orted &y a recent utility&ill)

4or an entity ; o&taining from t$e Registrar ofCom%anies a certificate of incor%oration( t$eregistered address and a list of s$are$oldersand directors


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"ffences for firms

It is an offence not to com%ly wit$ t$e a&oveo&ligations( designed to assist mem&ers indetecting and %reventing t$eir organisations&eing used for money laundering %ur%oses)

All %artners wit$in a %ractice 0and directors in afirm are %otentially lia&le on a @oint and several&asis for &reac$es of t$e firmJs o&ligations) Allindividuals are lia&le in res%ect of &reac$es oft$eir individual o&ligations)


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36P7 ACCA

E'ercise 1)1

Re*uired

$y is t$ere a need for et$ical guidance

for accountants in res%ect of moneylaunderingN


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Answer 1)1 In many countries t$e legal re*uirements are onerous

and t$e %enalties for non;com%liance are severe 0fore'am%le( in t$e 8K auditors risk long %rison sentences ift$ey commit an offence) ive guidance to act inaccordance wit$ law re*uirements)

Money laundering is widely defined and it is not alwayso&vious t$at an offence $as &een committed)

it$out t$e guidance in issue accountants may &e usedunintentionally to launder criminal funds)

In many countries t$e law creates a conflict &etween t$eet$ical duty of confidentiality to t$e client and t$e legalduty to re%ort money laundering offences) T$e guidance$el%s to clarify t$e mem&ersJ %rofessional duty to re%ortoffences)


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Professional duty of confidence

Accounting %rofessionals 0ACCA mem&ers are not in&reac$ of any %rofessional duty of confidence if t$eyre%ort in good fait$ any money laundering knowledge or

sus%icions to t$e a%%ro%riate aut$ority) T$is %rotection a%%lies even if sus%icions %rove later to

&e groundless( %rovided t$ey were made in good fait$) ,isclosure wit$out reasona&le grounds for knowledge or

sus%icions will increase t$e risk to &e in &reac$ ofconfidentiality)


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E!ERCI9E 1)-

ive five e'am%les of &usinesses w$ic$would &e more susce%ti&le to money

laundering t$an ot$ers)


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A#9ER 1)-

Any cas$ &ased &usinesses would &e %articularlysuita&le for criminals to launder money(%articularly ones w$ere t$e origins of t$e cas$

cannot &e easily %roven and w$ere services are%rovided rat$er t$an goods sold( for e'am%le Casinos :ookmakers

Private &anking Money transfer services


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MONEY LAUNDERING RIS)

INDICATIONS Transactions routed t$roug$ several @urisdictions 9ecrecy over transactions E'cessive use of wire transfers Pattern t$at after a de%osit( t$e same 0or nearly t$e

same amount is wired to anot$er financial institution arge currency instrument transactions Re%eated de%osits or wit$drawals @ust &elow t$e

monitoring t$res$old on t$e same day Hig$ value de%osits or wit$drawals not c$aracteristic of

t$e ty%e of account


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E'ercise 1)=

ou are t$e audit manager of oft Co a c$ain of nig$tclu&s),uring t$e course of t$e audit Mr Roy( an em%loyee of t$ecom%any( informed you t$at a su&stantial cas$ de%osit was

%aid into com%any?s &ank account and a mont$ later( t$esame amount was %aid &y direct transfer into a &ankaccount in t$e name of Evissa( a com%any &ased overseas)

T$e em%loyee informed you t$at Mr 4o' t$e managingdirector of oft Co $ad instructed $im not to record t$etransaction as it $ad not$ing to do wit$ oft Co?s &usiness)

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Answer 1)=

T$e transaction raises sus%icion of money laundering for t$efollowing reasons)

It $as &een stated t$at t$e %ur%ose of transaction $as

not$ing to do wit$ oft Co?s &usiness) T$is could &e a signof an attem%t to legitimise t$e %roceeds of a crime t$roug$oft Co &y concealing t$e illegal source of t$e cas$)

T$e amount of transaction is su&stantial for oft Co) An

unusually large transaction s$ould alert t$e auditor for t$e%ossi&ility of money laundering( es%ecially as it does noseem to relate to t$e &usiness of oft Co)

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Answer 1)=

T$e cas$ amount %aid into oft Co?s &ank account is t$esame as t$e amount %aid to Evissa) T$is could &e anattem%t &y Mr 4o' to make t$e cas$ a%%ear legitimate &y

moving t$roug$ several com%anies and @urisdictions) Mr Roy was instructed not to record t$e transaction in t$e

accounting records of oft Co) Increased secreacy overtransactions is anot$er indicator of money laundering)

T$e sus%icious transaction s$ould &e re%orted tofirm?s MR")

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Anti*%"ne( l#un$ering 'r"gr#%

T$e &asic elements to &e considered w$en designing ananti;money laundering %rogram include

dedicated resources

written %olicies and %rocedures com%re$ensive coverage timely re%orting and resolution of matters e'%licit management su%%ort sufficient training and education regular reviewGaudit of t$e %rogram)


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aws and regulations

Com%anies are su&@ect to laws andregulation w$ic$ t$ey must com%ly)

E'am%lesHealt$ and safety law

Em%loyment law

Environmental lawCom%any law

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47

aw and regulations

MA#AEME#T

A8,IT"R

Ensure t$e entity?s o%erations areconducted in accordance wit$ laws andregulations

Prevention and detection ofnoncom%liance

Res%onsi&ilities

Recognise t$at noncom%liance maymaterially affect t$e financial statements

#ot res%onsi&le for %reventing noncom%liance and can not detect non;com%liance wit$ all laws and regulations asmany of t$em not affect financial statements


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,ifficulties for detection

Reasons w$y is difficult for auditors not todetect all non;com%liances

May not affect t$e financial statements#on;com%liance is ultimately a mater oflegal determination 0may &e &eyond

auditor?s %rofessional com%etenceTestingGsam%le

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Auditors? understanding of laws

T$e auditor would usually o&tain a generalunderstanding of t$e laws and regulations

affecting t$e entity in t$e following ways 8se t$e e'isting knowledge 0and u%date

of t$e entity?s industry and &usiness

,iscuss G en*uire of management

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I9A -+.

T$e #u$it"rs+ res'"nsibilities for considering laws andregulations as %art of t$eir audit is discussed in I9A -+.Consideration of las and regulations in an audit offinancial statements!Pr"ce$ures

9$ould %lan so as to identify any e'am%les ofnoncom%lianceEvi$ence9$ould o&tain sufficient a%%ro%riate audit evidence of noncom%liance wit$ laws and regulations wit$ a direct effect on

material amounts and disclosures in t$e 49)D"cu%ent &in$ings,ocument non;com%liance and t$e results of discussionwit$ management( t$ose c$arged wit$ governance andt$ird %arties)


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I9A -+. 3Audit %rocedures

T$e auditor s$all %erform t$e following %roceduresto $el% identify instances of non com%liances t$atmay $ave a material effect on 4inancial 9tatements

In*uiring of management or t$ose c$arged wit$governance as to w$et$er t$e entity is incom%liance wit$ all a%%lica&le laws

Ins%ecting corres%ondence wit$ relevant regulatory

aut$ority

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E!AMPE9T$e I9A sets out e'am%les of t$e ty%e of information t$at mig$t

come to t$e auditorJs attention t$at may indicate non;com%liance)

Investigation &y a government de%artment or %ayment of fines

Payments for uns%ecified services or loans to consultants(

related %arties( em%loyees or government em%loyees 9ervices fees t$at a%%ear e'cessive in relation to t$osenormally %aid &y t$e entity or in its industry or to t$e servicesactually received

Purc$asing at %rices significantly a&ove or &elow market %rice

8nusual %ayments in cas$

8nusual transactions wit$ com%anies registered in ta' $avens

Adverse media comments


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Audit %rocedures w$en %ossi&le

non;com%liance is discovered $en t$e auditor &ecomes aware of information

concerning a %ossi&le instance of noncom%liance( t$eauditor s$ould o&tain

an understanding of t$en#ture

of t$e act and t$ecircumstances in w$ic$ it $as occurred( and su&&icient "ter in&"r%#ti"n to evaluate t$e %ossi&le

effect on t$e financial statements)

Any non;com%liance wit$ law or regulations s$ould &e

$"cu%ente$ and discussed wit$ t$e a%%ro%riate level ofmanagement) T$e auditor s$ould consider t$e im%licationsin relation to financial statements 0fines( litigation 3 %ro%erdisclosures and to ot$er as%ects of t$e audit( %articularlyt$e relia&ility of management re%resentations)


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Re'"rting n"n*c"%'li#nce

M#n#ge%ent #on;com%liance s$ould &e discussed wit$ t$ose

c$arged wit$ governance

If t$ose c$arged wit$ governance are involved( re%ort to$ig$er level of aut$ority eg audit committee) If not e'ist orauditor &elieves t$at not &e acted u%on 3 legal advice

S#re"l$ers Consider t$e im%act on audit re%ort 3 modified o%inion

Tir$ '#rties Is t$ere a statutory dutyN Is it in t$e %u&lic interestN "&tain legal advice


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55P7 ACCA

T$e auditor?s re%ort

"isagreement $ere t$e auditor concludes t$at t$e non;com%liance

$as a material effect on t$e financial statements( w$ic$

$as not &een amended( $e s$ould e'%ress a *ualified oradverse o%inion)Limitation on scope $ere ade*uate information a&out com%liance or

sus%ected noncom%liance cannot &e o&tained( t$e

auditor may need to e'%ress a *ualified o%inion ordisclaimer of o%inion due to limitation on t$e sco%e of t$eaudit)


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it$drawal from t$e engagement

T$e auditor may conclude t$at wit$drawalfrom t$e engagement is necessary w$en

t$e entity does not take t$e remedialaction t$at t$e auditor considersnecessary in t$e circumstances( even

w$en t$e non;com%liance is not materialto t$e financial statements)

Documents

Final Chapter 1 Revised 2015