Non-Compliance Discovery

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There are indicators that Non-compliance may have occurred

These are

  1. Government Investigations

  2. Fines or penalties

  3. Unspecified payments for to related parties or (government) employees

  4. Excessive sales commissions

  5. Purchasing at not market price

  6. Unusual bank transfers

  7. Payments without exchange control documentation

  8. Lack of adequate audit trail

Consequences of Non-Compliance

  • Provision for fines, charges etc

  • Potential disclosures needed

  • Decide if so serious that true and fair view is questioned

Procedures when possible noncompliance is discovered

These are:

  1. Document findings

  2. Discuss with management

  3. Discuss with their lawyer

  4. Discuss with own lawyer

  5. Consider impact on other areas of the audit

  6. Consider if you can now rely on other management representations

NOCLAR

Non-compliance with laws and regulations is sometimes referred to as NOCLAR

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