ISA 240 THE AUDIT RESPONSIBILITY RELATING TO FRAUD IN AN AUDIT OF FINANCIAL STATEMENTS

 ISA 240 deals with the auditor’s responsibilities relating to fraud in an audit of financial statements.

 The standard is effective for audits of financial statements for periods beginning on or after December 15, 2009. 

It describes the objectives of the auditor relating to fraud in an audit of financial statements and sets the requirements for professional skepticism, identification and assessment of the risks of material misstatement due to fraud, responses to the assessed risks of material misstatement due to fraud and for evaluation of audit evidence. ISA 240 also defines types of communications relating to fraud in an audit of financial statements such as written representations, communications to management and with those charged with governance and reporting fraud to an appropriate authority outside the entity.

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