ACCA Strategic Professional · Advanced Audit and Assurance (International) · Money laundering
A junior auditor at Tessen & Co notices unusually large, round-sum cash receipts from overseas parties with no commercial rationale at a client. Under ISA 250 (Revised) and anti-money laundering responsibilities, what is the auditor's responsibility regarding such laws?
The auditor must perform procedures to identify non-compliance with laws that may materially affect the financial statements and respond appropriately to any suspected non-compliance, including considering reporting duties. The auditor does not guarantee legal compliance, and management remains primarily responsible for ensuring it.
- AThe auditor must apply specified audit procedures to identify non-compliance that may have a material effect, and respond to any suspected non-compliance identified, including considering reportingCorrect
- BThe auditor has no responsibility for laws and regulations because these are management's duty
- CThe auditor must guarantee that the client has complied with all anti-money laundering laws
- DThe auditor must investigate every case of suspected non-compliance, however trivial, to its conclusion
Explanation
ISA 250 requires auditors to obtain an understanding of the legal framework, perform procedures to identify non-compliance with laws that directly affect the financial statements, and respond to suspected non-compliance, including evaluating the effects and considering reporting. Auditors do not guarantee compliance, and responsibility is not limited to management.
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