AUDIT PROCEDURES WHEN NON-COMPLIANCE IS IDENTIFIED:
INVESTIGATING THE NON-COMPLIANCE
1.) The auditor must understand the nature of the act and the situations in which it has occurred.
2.) Obtain further information to evaluate the possible effect on the financial statements.
COMMUNICATING AND REPORTING NON-COMPLIANCE:
1.) The auditor should communicate non -compliance with management except prohibited by law ISA 250.
2.) If the auditor believes the non-compliance is intentional and material,the matter must be communicated with those charged with governance.
3.) If auditor suspects those charged with governance are involved, it must be communicated to the audit- committee or supervisory board.
4.) If non-compliance has a material effect on the financial statement, a qualified or adverse opinion must be issued.
5.) The auditor must consider if they have legal, regulatory or ethical responsibilities to report non-compliance to third parties like regulatory authorities.
POSSIBLE REASONS FOR ENGAGEMENT WITHDRAWALS:
Reasons why external auditor could withdraw audit engagement that is, resign as auditor are: If
Ethical requirements may require a predecessor auditor to provide information on compliance to an incoming auditor.