CAS 250, Consideration of Laws and Regulations in an Audit of Financial Statements

Effective date:

Effective for audits of financial statements for periods ending on or after December 14, 2010, except for subsequent amendments

[Canadian Auditing Standard (CAS) 250, Consideration of Laws and Regulations in an Audit of Financial Statements, should be read in conjunction with CAS 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Canadian Auditing Standards.]


This Canadian Auditing Standard (CAS) deals with the auditor's responsibility to consider laws and regulations in an audit of financial statements. This CAS does not apply to other assurance engagements in which the auditor is specifically engaged to test and report separately on com­pliance with specific laws or regulations.

It is the responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations.

The requirements in this CAS are designed to assist the auditor in identifying material misstatement of the financial statements due to non-compliance with laws and regulations. However, the auditor is not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the CASs.

This CAS distinguishes the auditor's responsibilities in relation to compliance with two different categories of laws and regulations.

The auditor's responsibility is to obtain sufficient appropriate audit evidence regarding compliance with the provisions of those laws and regulations generally recognized to have a direct effect on the determination of material amounts and disclosures in the financial statements such as tax and pension laws and regulations

The auditor's responsibility also includes performing specified audit procedures to help identify non-compliance with other laws and regulations that do not have a direct effect on the determination of the amounts and disclosures in the financial statements, but compliance with which may be fundamental to the operating aspects of the business, to an entity's ability to continue its business, or to avoid material penalties (for example, compliance with the terms of an operating license, compliance with regulatory solvency requirements, or compliance with environmental regulations); non-compliance  with such laws and regulations may therefore have a material effect on the financial statements.

In October 2016, the IAASB is­sued limited amendments to ISA 250 in order to address non-compliance with laws or regulations (NOCLAR), which are ef­fec­tive for pe­ri­ods be­gin­ning on or af­ter De­cem­ber 15, 2017. Subsequently, also in October 2016, the AASB approved revisions to CAS 250 and conforming amendments to other standards, related to adoption of the IAASB’s limited amendments to ISA 250. The amendments to CAS 250 are effective for financial statement periods ending on or after December 15, 2018 and were included in a Handbook update in March 2017.  

His­tory of CAS 250




October 2016

Amendments to CAS 250 related to NOCLAR

Effective for financial statement periods ending on or after December 15, 2018. The amendments were included in a Handbook update in March 2017. See Project.

Note: Our history summary does not take into account consequential amendments made as the result of other projects.

Amendments under consideration

  • None

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