Responsibilities of management and auditors

In this lesson

1. 0:00 Advanced Audit and Assurance: Laws and Regulations
2. 0:40 Types of Laws and Regulations Entities Must Comply With
3. 1:27 Distinction Between Laws and Regulations
4. 2:27 Material Effects of Non-Compliance on Financial Statements
5. 3:29 Management and Auditor Responsibilities Explained
6. 5:00 Management's Policies and Procedures for Compliance
7. 6:17 Employee Training and Code of Conduct Monitoring

About this lesson

You'll explore the different types of laws and regulations entities must navigate, from employment law and health and safety to data protection and environmental provisions, and understand how non-compliance can create material misstatements in financial statements, trigger provisions and fines, and even threaten going concern. The lesson breaks down management's core responsibilities: establishing prevention and detection controls, monitoring legal changes, implementing codes of conduct with appropriate discipline, engaging legal advisers, and maintaining a checklist of significant compliance obligations. You'll also see why the auditor's role is to design tests that detect material non-compliance—not to prevent it—and how findings like unrecorded fines or missing provisions must be addressed in the financial statements. This session equips you to understand the control environment around regulatory compliance, recognise when non-compliance poses a financial reporting risk, and apply this knowledge to audit procedures and reporting decisions in your AAA exams and practice.

Duration: 8m