Covering: ISA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements, Money Laundering, Forensic Accounting, IAPN 1000 Special Considerations in Auditing Financial Instruments.

Why do I need to read this section?

Technology, globalisation and the complexity that goes with them can facilitate sophisticated frauds. Audits of financial statements conducted in accordance with ISAs are not fraud investigations, but increasing regulation and expectations of auditors mean that auditors now probably spend more time on fraud, laws and regulations than they used to. Money laundering regulations in particular worry practitioners. The development of forensic accounting techniques and the demand for forensic accounting services have also grown to the extent that forensic auditing expertise is now a recognised specialism in its own right.

The auditors’ responsibilities in relation to fraud, laws and regulations are well established and easy to examine. Money laundering is a relatively new area but sufficiently well established to be examined, regularly. Forensic accounting is generally examined in higher level papers. Very complex financial instruments are outside the scope of many syllabuses. Auditing guidance on financial instruments covers all but the simplest of financial instruments.

What is important ...

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