The document discusses the responsibilities of auditors and management regarding regulations. It states that management is responsible for complying with regulations according to ISA 250, while auditors are responsible for obtaining reasonable assurance that financial statements are free from material misstatement due to fraud or error according to ISA 200. Auditors must also obtain sufficient appropriate evidence that the entity is in compliance with regulations that have a direct effect on financial statements, such as tax laws. To do so, auditors understand regulations, see how the entity complies, talk to those responsible, and obtain written confirmation. Auditors also update their understanding of regulations and ask management about fundamental and compliance issues as well as how litigation claims are identified, evaluated, and accounted for.