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.
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
The Fraud Task Force is revising ISA 240 in the areas highlighted in the project proposal. Areas discussed with the IAASB to date include:
- The introduction, including the role and responsibilities of the auditor relating to fraud in an audit of financial statements;
- Specialized skills;
- Communication with those charged with governance
- Identifying and assessing the risks of material misstatement due to fraud;
- Presumption of fraud risk in revenue recognition;
- Journal entries; and
- Transparency in the auditor’s report on fraud.
The Task Force will bring an updated draft of proposed ISA 240 (Revised) to the Board in December 2022
Task Force Information
IAASB Staff Contacts
Task Force Members
Technology Fraud Roundtable - Cover-note and Agenda Expectation Gap and Auditor Reporting Roundtable – Cover-note and Agenda Fraud and Going Concern in Less Complex Entities – Cover-note and Agenda IAASB Fraud Technology Roundtable Recordings (Full session and Breakouts) Key Takeaways from IAASB's Roundtable Series on Fraud and Going Concern