Wiley Practitioner's Guide to GAAS 2022

5AU-C 240 Consideration of Fraudin a Financial Statement Audit

• Scope
• Definitions of Terms
• Objectives of AU-C Section 240
• Requirements
  • Description and Characteristics of Fraud
  • Responsibilities of the Auditor
  • Professional Skepticism
  • Engagement Team Discussion about Fraud (Brainstorming)
  • Obtaining Information Needed to Identify Fraud Risks
  • Inquiries of Internal Auditors
  • Inquiries of Others within the Organization
  • Inquiries of Those Charged with Governance
  • Considering the Results of Analytical Procedures
  • Considering Fraud Risk Factors
  • Identifying Fraud Risks
  • Assessing Identified Risks
  • Responding to the Results of the Assessment of Risk of Material Misstatement
  • Evaluating Audit Evidence
  • Communication about Possible Fraud to Management and Those Charged with Governance
  • Documentation
  • Antifraud Programs and Controls
• AU-C 240 Illustrations

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, Significant unusual transactions.

OBJECTIVES OF AU-C SECTION 240

The objectives of the auditor under AU-C Section 240 are to:

1. Identify and assess the risks of material misstatement of the financial statements due to fraud;
2. Obtain sufficient appropriate audit evidence regarding ...