The correct answer is: If firms of auditors do not follow IAASB pronouncements, they may be subject to disciplinary proceedings instituted by the professional body that regulates the firm.

There is no requirement for auditors to comply with International Standards on Auditing in legislation, and there are no civil or criminal penalties for not doing so. Auditors who comply with International Standards on Auditing have a defence in court proceedings, but this does not mean that they cannot be found guilty of negligence. International Standards on Auditing should be applied to all audits where a 'true and fair' opinion is given. Firms cannot opt out of this.