IAASB Issues Fact Sheet on Revised ISA 240 (Fraud)
Brought to you by SA Accounting Academy: The International Auditing and Assurance Standards Board (IAASB) has issued a Fact Sheet to assist practitioners in implementing the revised International Standard on Auditing (ISA) 240.
The revised International Standard on Auditing (ISA) 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, clarifies the responsibilities of auditors regarding fraud detection and reporting. The standard emphasizes the application of a “fraud lens” during the identification and assessment of risks of material misstatement.
Key enhancements in the revised standard include:
- Strengthened procedures for identifying and assessing risks of material misstatement due to fraud;
- Requirement for appropriate responses to assessed fraud risks; and
- Increased transparency in the auditor’s reports for publicly traded entities.
The IAASB Fact Sheet serves as a technical resource to support the transition to the updated requirements. Additionally, the IAASB has indicated that a video series providing further guidance on ISA 240 (Revised) will be released in the third quarter of 2025.
Click here to download the IAASB ISA 240 (Revised) Fraud Fact Sheet.
What this means for you, your business, or your clients
- For yourself: You must familiarize yourself with the “fraud lens” concept to ensure professional skepticism is appropriately documented during risk assessment phases.
- For your business: Audit firms must update their internal quality management systems and audit programs to incorporate the revised risk identification and response requirements of ISA 240.
- For your clients: Publicly traded entities will experience more rigorous inquiries regarding fraud risk and should expect more detailed reporting on these matters in the final audit report.
Originally published at https://accountingacademy.co.za/news/read/isa-570-revised-2024-going-concern-fact-sheet-1