What the Project Aims to Achieve

The IAASB is currently working on a project to revise ISA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. In revising this standard, the IAASB aims to:

  • Clarify the role and responsibilities of the auditor for fraud in an audit of financial statements.
  • Promote consistent behavior and facilitate effective responses to identified risks of material misstatement due to fraud through strengthening ISA 240 to establish more robust requirements and enhance and clarify application material where necessary.
  • Enhance ISA 240 to reinforce the importance, throughout the audit, of the appropriate exercise of professional skepticism in fraud-related audit procedures.
  • Enhance transparency on fraud-related procedures where appropriate, including strengthening communications with TCWG and the reporting requirements in ISA 240 and other relevant ISAs.

Project Timeline

The following table sets out the project timeline. Please note that these are current targeted milestones and may change as the work in this area progresses.

Current Status of the Project

At the June 2022 IAASB meeting, the Fraud Task Force discussed with the Board its views and recommendations for several key issues and related proposed actions identified in the project proposal for the revision of ISA 240, pertaining to:

  • The introduction, including the role and responsibilities of the auditor relating to fraud in an audit of financial statements;
  • Specialized skills;
  • Identifying and assessing the risks of material misstatement due to fraud;
  • Presumption of fraud risk in revenue recognition;
  • Journal entries; and
  • Communication with those charged with governance.

As part of its next steps, the Fraud Task Force will conduct outreach with the users of financial statements in June and July 2022 relating to transparency in the auditor’s report and report back to the Board in September 2022. In December 2022, the Fraud Task Force will bring other additional topics as outlined in the project proposal for the Board to deliberate, in addition to advancing the areas previously discussed by the Board.

Task Force Information

IAASB Staff Contacts

Task Force Members


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