SA 240: THE AUDITOR’S RESPONSIBILITY RELATED TO FRAUD IN AN AUDIT OF FINANCIAL STATEMENTS

1. SA 240: THE AUDITOR’S RESPONSIBILITY
RELATED TO FRAUD IN AN AUDIT OF
FINANCIAL STATEMENTS
SHIVANI LAHOTI

2. OBJECTIVE
Identify and assess
the risk of material
misstatement due
to fraud.
Obtain adequate
audit evidence for
the risk identified.
Respond
appropriately to the
identified or
suspected fraud.
SHIVANI LAHOTI

3. CHARACTERISTICS OF FRAUD
The auditor is concerned with fraud that causes a material misstatement in the financial
statements. Two types of intentional misstatements are relevant to the auditor:
(a) Misstatements resulting from fraudulent financial reporting
(b) Misstatements resulting from misappropriation of assets
SHIVANI LAHOTI

4. RESPONSIBILITY FOR PREVENTION AND
DETECTION OF FRAUD
•The primary responsibility for the prevention and detection of fraud rests with
both those charged with governance of the entity and management
•The auditor is responsible for obtaining reasonable assurance that the
financial statements taken as a whole are free from material misstatement,
whether caused by fraud or error.
SHIVANI LAHOTI

5. REQUIREMENTS
1. Professional Skepticism
2. Discussion among Engagement Team
3. Risk Assessment Procedures and Related Activities
SHIVANI LAHOTI

6. RISK ASSESSMENT PROCEDURES
SHIVANI LAHOTI

7. THANKYOU
SHIVANI LAHOTI