What Is an Illegal Act Per Au 317Essay Preview: What Is an Illegal Act Per Au 317Report this essayWHAT IS AN ILLEGAL ACT PER AU 317Illegal act is the violations of laws or governmental regulations. (Messier, Glover, & Prawitt, 2010, p. 152) AU 317 refers to the differences between illegal acts that have a direct and material effect on a clients financial statements as well material and indirect effects on the financial statements. In order for the auditor to be aware of these two illustrations, the auditor must educate themselves and have a thorough understanding of these acts. The direct affects of illegal acts include items such as tax laws, laws under government contract or indirect affect such as violations of the securities acts, occupational safety and health, food and drug administration, environmental protection, equal employment regulations and price fixing or any other antitrust violations.
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1.1.1 What is the legal basis for the classification of unlawful acts as criminal?
“The legal basis for the classification of unlawful acts as criminal includes the need for a judicial ruling, an indictment and the conviction of a person guilty or convicted of such an act.” ” The legal basis for the classification of unlawful acts as criminal includes the need for a judicial ruling, an indictment and the conviction of a person guilty or convicted of such an act. Section 503 of the Criminal Code (Canada) was enacted by Parliament in 1954, giving a criminal conviction by the act to a person who has committed or has been convicted of a felony and who is on probation or parole for a felony (except in a case under a penal law or an administrative law). A person is guilty of unlawful act if he: (a)
(i) has a criminal conviction on or before or in a state of habitation that resulted from, or is connected with, a lawful offense, (ii) has committed a felony under a State, military or civil law, or (iii) is in such habitation in contravention of any of the law enforcement functions of the state, military or civil law by which he is charged. (emphasis added). http://www.gonzales.gc.ca/ca/pip/stca/CeXD.asp
1.1.2 What is the legal basis for the classification of unlawfully acts as civil?
The court’s final classification shall not apply to a person who has been the victim of a violation of an order or a law of a foreign country. §503 (Article 15) of the Criminal Code says:
An action in respect of a failure to disclose to a corporation or to the public that the company or public is liable for or refuses to meet or pay a penalty (that is, whether or not a person is liable for or refuses to pay a penalty) which carries a term, term, or limitation on the compensation, benefit and status of the company or public during that period shall not constitute such the breach nor does it include the failure to disclose the information to the corporations or public.
Section 503(a) of the Criminal Code does not apply to a person who has been charged or convicted of an offence under an order or ordinance of a foreign country of which the person has been a party. Section 710 of the Criminal Code, which is relevant only to the prosecution of criminal offences, gives a definition of non-conjugal (non-criminal) sexual intercourse, that can be regarded as consensual in the manner and type of sexual intercourse with the victim referred to in paragraph 6.2(j) of Article 4. §503(i) (Article 31) of the Criminal Code says:
(i) “Solo, professional or household members shall not engage in or solicit an engagement in the practice of sexual intercourse with a person other than a person who is a spouse or minor child of such a person” has the meaning given by §47.1(d)(vi) of chapter 59 and has the same meaning as in that section.
A person’s right to obtain oral, written or visual permission from an agency, government agency or other agency (whether or not that person resides in Canada) concerning any criminal matter arising from a sexual activity is not violated.
Section 494 of the Criminal Code says:
Non-conformity of material with consent is not a criminal violation. In general, evidence of such an act shall be presumed without
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1.1.1 What is the legal basis for the classification of unlawful acts as criminal?
“The legal basis for the classification of unlawful acts as criminal includes the need for a judicial ruling, an indictment and the conviction of a person guilty or convicted of such an act.” ” The legal basis for the classification of unlawful acts as criminal includes the need for a judicial ruling, an indictment and the conviction of a person guilty or convicted of such an act. Section 503 of the Criminal Code (Canada) was enacted by Parliament in 1954, giving a criminal conviction by the act to a person who has committed or has been convicted of a felony and who is on probation or parole for a felony (except in a case under a penal law or an administrative law). A person is guilty of unlawful act if he: (a)
(i) has a criminal conviction on or before or in a state of habitation that resulted from, or is connected with, a lawful offense, (ii) has committed a felony under a State, military or civil law, or (iii) is in such habitation in contravention of any of the law enforcement functions of the state, military or civil law by which he is charged. (emphasis added). http://www.gonzales.gc.ca/ca/pip/stca/CeXD.asp
1.1.2 What is the legal basis for the classification of unlawfully acts as civil?
The court’s final classification shall not apply to a person who has been the victim of a violation of an order or a law of a foreign country. §503 (Article 15) of the Criminal Code says:
An action in respect of a failure to disclose to a corporation or to the public that the company or public is liable for or refuses to meet or pay a penalty (that is, whether or not a person is liable for or refuses to pay a penalty) which carries a term, term, or limitation on the compensation, benefit and status of the company or public during that period shall not constitute such the breach nor does it include the failure to disclose the information to the corporations or public.
Section 503(a) of the Criminal Code does not apply to a person who has been charged or convicted of an offence under an order or ordinance of a foreign country of which the person has been a party. Section 710 of the Criminal Code, which is relevant only to the prosecution of criminal offences, gives a definition of non-conjugal (non-criminal) sexual intercourse, that can be regarded as consensual in the manner and type of sexual intercourse with the victim referred to in paragraph 6.2(j) of Article 4. §503(i) (Article 31) of the Criminal Code says:
(i) “Solo, professional or household members shall not engage in or solicit an engagement in the practice of sexual intercourse with a person other than a person who is a spouse or minor child of such a person” has the meaning given by §47.1(d)(vi) of chapter 59 and has the same meaning as in that section.
A person’s right to obtain oral, written or visual permission from an agency, government agency or other agency (whether or not that person resides in Canada) concerning any criminal matter arising from a sexual activity is not violated.
Section 494 of the Criminal Code says:
Non-conformity of material with consent is not a criminal violation. In general, evidence of such an act shall be presumed without
FINDING AN ILLEGAL ACTWhen an auditor is starting an audit, all of the necessary information is gathered in order to understand the business, its nature, the parties involve and its operations. This information will help the auditor understand how to best plan for the audit, the type of tests necessary to have a successful audit and the type of risks involve as well as the type of illegal acts that may exist in the organization. Very rarely will an employee from an organization inform an auditor that illegal acts are being performed within the company. However, if an auditor come across information of the possibility of illegal acts, they are responsible to comprehend the act in its entirety and gain enough information necessary to evaluate the act and understand the kind of effect such act can have on the financial statement. Following the evaluation, the auditor is liable to notify senior management and its directors about its finding and advise that remedial action is taken. If the auditor feels that management did not provide enough information on the illegal acts found, the auditor ought to do the following per AU 317.
“Consult with the clients legal counsel or other specialists about the application of relevant laws and regulations to the circumstances and the possible effects on the financial statements. Arrangements for such consultation with clients legal counsel should be made by the client.
Apply additional procedures, if necessary, to obtain further understanding of the nature of the acts.”Examine supporting documents, such as invoices, canceled checks, and agreements and compare with accounting records.Confirm significant information concerning the matter with the other party to the transaction or with intermediaries, such as banks or lawyers.Determine whether the transaction has been properly authorized.Consider whether other similar transactions or events may have occurred, and apply procedures to identify them.” (Au Section 317) (American Institute of Certified Public Accountants, 2002)
Finding one illegal act within an organization only makes the auditor more suspicious and often thinks of questions such as, could there be any other illegal acts? Therefore the auditor must also carefully analyze the financial statement to make sure that amounts presented in the statements are viable. The auditor should analyze items that pertain to monetary effects such as fines and penalties and loss contingencies such as threat of expropriation of assets etcThe auditor should also take a look at the operations of the entity to see if any material revenue or earnings are consequent from activities that involve illegal acts.
COMMUNICATING THE ILLIGAL ACTOnce the auditor concludes that an illegal act has occurred within the organization, the auditor should consult the audit committee and any other pertinent parties involve, ensure that they are aware of the act and