Fraud: Evaluation and Communication

Question 1

When should the auditor evaluate whether the results of the auditing procedures affect the auditor’s initial assessment of material fraud risk?

Answer 1

Near the end of the audit

Question 2

What 7 things should the auditor document related to the consideration of fraud in the financial statement audit?

Answer 2

1 The discussion among engagement personnel about fraud in planning the audit
2 The procedures performed to obtain information necessary to assess the risks of material fraud
3 Specific risks of material fraud that were identified
4 Reasons supporting the auditor’s conclusion
5 The results of procedures performed to further address the risk of management override of controls
6 Other conditions and analytical relationships that caused the auditor to perform additional auditing procedures
7 The nature of any communication about fraud made to management, those charged with governance