5AU-C 240 Consideration of Fraud in a Financial Statement Audit
Objectives of AU-C Section 240
Description and Characteristics of Fraud
Responsibilities of the Auditor
Engagement Team Discussion about Fraud (Brainstorming)
Obtaining Information Needed to Identify Fraud Risks
Responding to the Results of the Assessment
Communication about Possible Fraud to Management and Those Charged with Governance
SCOPE
AU-C 240 focuses on the auditor’s responsibility for fraud in a financial statement audit. AU-C 240 complements and expands on guidance in AU-C 315 and 330 regarding risks of material misstatements. (AU-C 240.01)
DEFINITIONS OF TERMS
Source: AU-C 240.11. For definitions related to this standard, see Appendix A, “Definitions of Terms”: Fraud, Fraud risk factors.
OBJECTIVES OF AU-C SECTION 240
The objectives of the auditor under AU-C Section 240 are to:
- Identify and assess the risks of material misstatement of the financial statements due to fraud;
- Obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and
- Respond appropriately to fraud or suspected fraud identified during the audit.
(AU-C 240.10)
REQUIREMENTS
Description and Characteristics of Fraud
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