- 10 Marks
AAA – May 2017 – L3 – Q3a – The regulatory environment | Professional responsibility and liability
Discuss the implications of suspected non-compliance with insurance law on a company's operations, financial statements, and the audit process.
Question
Your audit firm is auditing the current year’s financial statements of a major client in the insurance industry. At the planning stage when the engagement partner was doing the risk assessment, he had information that the company is under investigation by the National Insurance Commission for non-compliance with regulations. The client may be liable to sanctions if found culpable.
Non-compliance with laws and regulations has many implications for the operations of entities, their financial statements, and the audit of their financial statements.
Required:
i) Discuss the implications of the suspected non-compliance with the insurance law by the client on its operations and the financial statements. (5 marks)
ii) Evaluate the implications of the client’s non-compliance with the Insurance law on your audit. (5 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Audit Implications, Financial Statements, Insurance Law, Non-compliance, Risk Assessment
- Level: Level 3