Ministry of Justice
On January 31, 2019 No. 53639
Appendix No. 7
to the Order of the Ministry of Finance of the Russian Federation of January 9, 2019 No. 2n
The International Standard of Audit (ISA) 250 "Consideration of the laws and regulations during financial records audit" should be considered together with MCA 200 "Main objectives of the independent auditor and carrying out audit according to International standards of audit".
MCA 250 (reviewed) was approved by Council for supervision of observance of public concerns (PIOB) which came to conclusion that the procedure of development of the standard had proper character and public concerns were properly observed.
Scope of this standard
1. This International Standard of Audit (ISA) establishes the auditor's obligations on consideration of the laws and regulations when carrying out financial records audit. This standard is not applied to the tasks providing confidence within which before the auditor the specific purpose of check and forming of the separate conclusion about observance of certain laws or regulations is set.
Operation of the laws and regulations
2. The laws and regulations considerably differ on influence on the financial reporting. Those laws and regulations which are applied to the organization constitute the legislation. Provisions of some laws or regulations exert direct impact on the financial reporting in such a way that they determine numerical indicators and disclosure of information in the financial reporting of the organization. Other laws or regulations shall be observed by management or establish provisions according to which conducting activities is allowed to the organization, but they do not exert direct impact on the financial reporting of the organization. Some organizations conduct the activities in industries with tough normative regulation (for example, banks and the chemical companies). To activities of others set only of those laws and regulations which belong in general to operational aspects of activities is applied (for example, the laws and regulations relating to labor protection and health and also to providing the equal rights in case of employment). Non-compliance with the laws and regulations can lead to penalties, legal proceedings or other consequences for the organization which can have significant effect on the financial reporting.
Responsibility for compliance with laws and regulations (see the Items A1 - A 8)
3. Responsibility of management, under the supervision of persons who are responsible for corporate management is in providing implementation of organization activity according to provisions of the laws and regulations, including observance of provisions of the laws and regulations which determine numerical indicators and disclosure of information in the financial reporting of the organization.
Responsibility of the auditor
4. Requirements of this standard are designed to help the auditor with identification of essential misstatement of the financial reporting owing to non-compliance with the laws and regulations. However the auditor does not bear responsibility for prevention of such non-compliance, and it is impossible to expect that he will find all facts of non-compliance with the laws and regulations.
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