IAASB: Professional Skepticism in Revised ISA 570 and ISA 240

Posted 25 July 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: In terms of the International Auditing and Assurance Standards Board (IAASB) framework, the board has issued a non-authoritative publication detailing the reinforcement of professional skepticism in International Standard on Auditing (ISA) 570 (Revised 2024) and ISA 240 (Revised).

The publication, titled “How the IAASB’s Revised Going Concern and Fraud Standards Reinforce Professional Skepticism,” was developed with input from the IAASB’s Professional Skepticism Consultation Group. It aims to assist auditors in applying a consistent questioning mindset throughout the audit process, specifically regarding the identification and assessment of risks of material misstatement due to fraud or going concern issues.

The revisions to ISA 570 (Revised 2024), Going Concern, and ISA 240 (Revised), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, are effective for audits of financial statements for periods beginning on or after 15 December 2026. The new guidance highlights key enhancements to these standards, including:

  • The requirement for auditors to maintain a questioning mindset and remain alert for conditions that may indicate possible misstatement due to error or fraud.
  • The necessity of considering and evaluating contradictory evidence rather than only seeking corroborating evidence.
  • The expectation that auditors will appropriately challenge management’s assumptions and judgments regarding financial reporting.

Click here to download How the IAASB’s Revised Going Concern and Fraud Standards Reinforce Professional Skepticism.

What this means for you, your business, or your clients

  • For yourself: You must update your Continuing Professional Development (CPD) records and technical knowledge to incorporate the revised skepticism requirements before the 15 December 2026 effective date.
  • For your business: Audit firms must revise their internal audit methodologies and quality management systems to ensure that the evaluation of contradictory evidence is explicitly documented in all engagement files.
  • For your clients: Clients should be advised that management assumptions regarding going concern and fraud risk will face more rigorous challenge, requiring them to provide more substantive evidence to support their financial statement assertions.

Originally published at https://accountingacademy.co.za/news/read/iaasb-professional-skepticism-in-the-revised-fraud-going-concern-standards

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