Question

5. Describe the relevant statutory, legislative and regulatory requirements for documentation of accounting procedures

Answer 1

Both statutory requirements and regulatory requirements are those requirements that are required by law. These requirements are non-negotiable and must be complied with. Failure to comply a legal requirement may result in a fine or penalty and possibly a custodial sentence for the person or persons responsible or organization for such failure.

“Statutory refers to laws passed by a state and/or central government, while regulatory refers to a rule issued by a regulatory body appointed by a state and/or central government.”

Statutory requirements are those requirements which are applicable by virtue of law enacted by the government. These are enacted by passing the law in the legislative assembly or parliament. A regulatory requirement can be termed as administrative legislation that constitutes or constraints rights and allocates responsibilities. It is somewhat different from the statutory legislation and there can be following types of regulations applicable on an organization:

- Legal restrictions or responsibilities declared by a government authority

- Self regulation by an industry through trade association

Standard requires an organization to determine and control the statutory and regulatory requirements applicable to the organization’s products and services. It is the responsibility of the organization to demonstrate compliance within its quality management system. On perusal this ISO/FDIS 9001: 2015 QMS Standard, we find, in the introduction part of the standard indicates that this standard, can be used by internal and external parties. So it is imperative for the organization to be aware of the general and specific statutory and regulatory requirements applicable to the product and services within the scope of the quality management system.

The term ‘statutory and regulatory requirements’ has been used in 0.1 General of this standard, which states, ‘The potential benefits to an organization of implementing the quality management system based on this international standard are i) the ability to consistently provide products and services that meet the customer and applicable statutory and regulatory requirements.