International Standard on Auditing 250: Consideration of Laws and Regulations in an Audit of Financial Statements provides guidance regarding auditor’s responsibility of compliance with laws and regulations in audit of financial statements.
ISA 250 requires auditor to identify misstatements that could be material if applicable laws and regulations are violated by the entity. It is the duty of management to ensure that entity has complied with all the requirements of relevant laws. In order to identify non-compliance auditor must maintain an attitude of professional skepticism. If non-compliance is found then auditor shall take necessary steps in light of ISA 250 and consider its effects on auditor’s report.