In: Accounting
Audit is an independent examination of financial statement and auditors are also expected to express an opinion on true and fair view of financial statement based on his independent audit report. It is the responsibility of management to prepare the financial statements in compliance with all the laws and regulations as applicable on organization. Therefore, the responsibility of auditor for identifying the non-compliance with laws and regulation by organization depends upon whether such non-compliance has any direct effect on the financial statement or not. The auditors’ responsibility is to detect the material misstatement in financial statement by collecting sufficient and appropriate evidences to get reasonable assurance material misstatement in financial statements. Further, auditor will also perform procedures to identify the instances of non-compliance of laws and regulations which have no direct effect on financial statements but may affect it indirectly.