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SSA 250 (Revised) deals with the consideration of laws and regulations in an audit of financial statements. The revised standard is based on the International Standard on Auditing (ISA) 250 (Revised), Consideration of Laws and Regulations in an Audit of Financial Statements issued by the International Auditing and Assurance Standards Board (IAASB).
The amendments are in response to the requirements addressing Non-Compliance with Laws and Regulations (NOCLAR) in the revised Ethics Pronouncement (EP) 100 Code of Professional Conduct and Ethics and are intended to:
- Align aspects of SSA 250 (Revised) to the revised EP 100, particularly the definition of non-compliance and the examples of laws and regulations within the scope of SSA 250 (Revised) (see paragraphs 12, A6 and A9–A10 of SSA 250 (Revised)).
- Clarify the requirement regarding the auditor’s determination of whether to report identified or suspected NOCLAR to an appropriate authority outside the entity and the auditor’s duty of confidentiality, in order to recognize the different provisions of laws, regulations, or relevant ethical requirements (see paragraphs 29 and A28–A34 of SSA 250 (Revised)).
- Highlight that the auditor may have additional responsibilities under law, regulation or relevant ethical requirements, including possible documentation requirements and communicating to other auditors (see paragraph 9 of SSA 250 (Revised)).
- Highlight the implications of identified or suspected NOCLAR on the audit, for example, the reliability of management’s representations, the implications for the auditor’s report, and the consideration of whether to withdraw from the engagement (see paragraphs 22 and A23–A27 of SSA 250 (Revised)).
- Emphasize the requirements in the revised EP 100 relating to the communication of identified or suspected NOCLAR to a group engagement partner or an auditor at a component (see paragraph A8 of SSA 250 (Revised)).
- Draw attention to the fact that, in certain cases, communication with management or those charged with governance may be restricted or prohibited by law or regulation, for example tipping-off provisions that might prejudice an investigation by an appropriate authority into an actual, or suspected, illegal act (see paragraphs 20, 23 and A21 of SSA 250 (Revised)).
Arising from SSA 250 (Revised), conforming amendments are made to other relevant standards:
- SSQC 1, Quality Control for Firms a for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements
- SSA 210, Agreeing the Terms of Audit Engagements
- SSA 220, Quality Control for an Audit of Financial Statements
- SSA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements Accounting Estimates
- SSA 260 (Revised), Communication with Those Charged with Governance
- SSA 450, Evaluation of Misstatements Identified During the Audit
- SSA 500, Audit Evidence
- SSRE 2400 (Revised), Engagements to Review Historical Financial Statements
- SSAE 3000 (Revised), Assurance Engagements other than Audits or Reviews of Historical Financial Information
- SSAE 3402, Assurance Reports on Controls at a Service Organization
- SSAE 3410, Assurance Engagements on Greenhouse Gas Statements
- SSRS 4410 (Revised), Compilation Engagements
Effective Date
The revised standard is effective for audits of financial statements for periods beginning on or after 15 December 2020.
Click here for SSA 250 (Revised)