Wiley Practitioner's Guide to GAAS 2013: Covering all SASs, SSAEs, SSARSs, and Interpretations

AU 316: Consideration of Fraud in a Financial Statement Audit1

AU-C 240: Consideration of Fraud in a Financial Statement Audit

AU EFFECTIVE DATE AND APPLICABILITY

Original Pronouncement	Statement on Auditing Standards (SAS) 99
Effective Date	This standard currently is effective.
Applicability	Audits of financial statements in accordance with generally accepted auditing standards (GAAS).

AU-C EFFECTIVE DATE

SAS No. 122, Codification of Auditing Standards and Procedures, is effective for audits of financial statements with periods ending on or after December 15, 2012.

AU-C 230 does not change extant requirements in any significant respect. The definition of fraud was changed to conform to ISA 240.

AU DEFINITIONS OF TERMS

Fraud. An intentional act that results in a material misstatement in financial statements that are the subject of an audit. The primary distinction between fraud and error is whether the underlying action that causes the misstatement of the financial statements is intentional or unintentional.

Fraud risk factors. Events or conditions that indicate incentives/pressures to perpetrate fraud, opportunities to carry out the fraud, or attitudes/rationalizations to justify a fraudulent action. These conditions may alert the auditor to a possibility that fraud may exist.

Misstatements arising from fraudulent financial reporting. Intentional misstatements or omissions of amounts or disclosures in financial statements designed to deceive financial statement users ...