Part 2: It’s all about expectations, What is fraud in audit?
Part 3: Responsibility towards fraud, ISA 240 Objectives
Part 4: Assessing risk of fraud
Part 5: Responses to assessed risk, Evaluation of evidence obtained
Part 6: Auditor’s inability to continue engagement, Written representation
Part 7: Communication with those charged with governance, Communication to regulatory authorities, Documenting fraud
Read Online ISA 240 Test10 Communication with those charged with governance
Auditor shall communicate to those charged with governance or appropriate level of management regarding their responsibilities to prevent and detect fraud.
If auditor identifies fraud or suspects it that involves management or employee having significant employee on internal control system or others that can affect financial reporting then auditor shall communicate the matter to those charged with governance.
11 Communication to regulatory authorities
As per code of conduct auditor is required to keep client’s information confidential but where legal responsibilities override this duty then auditor shall consider his responsibilities of disclosing the matters to responsible authorities if fraud is detected or suspected
12 Documenting fraud
The auditor shall document following as part of audit documentation related to fraud:
- Significant decisions reached during engagement team discussions
- Risk of material misstatement due to fraud at financial statement and assertion level
- Responsive procedures based on assessed risk i.e. their nature, timing and extent
- Evidence obtained as a result of application of responsive procedures
- Communication with those charged with governance, authorities, regulators etc
- Reasons of auditor’s conclusion that risk of material misstatement due to fraud in certain aspect of financial information is not related to engagement