Documentation of Fraud Consideration
The auditor should document:
- The engagement team’s discussion, when planning the audit, about the entity’s susceptibility to fraud. The documentation should include how and when the discussion occurred, audit team members participating, and the subject matter covered.
- Procedures performed to obtain the information for identifying and assessing the risks of material misstatements due to fraud.
- Specific risks of material misstatement due to fraud identified by the auditor, and a description of the auditor’s response to those risks.
- If improper revenue recognition has not been identified as a risk factor, the reasons supporting such conclusion.
- The results of procedures performed that addressed the risk that management would override controls.
- Other conditions and analytical relationships that caused the auditor to believe that additional procedures or responses were required, and any other further responses to address risks or other conditions.
- The nature of communications about fraud to management, the audit committee, and others.
Read previous Part:
Fraud Consideration In Audit [SAS 99 Fundamentals]
Obtaining Information Needed To Identify Fraud Risks
Identifying Fraud Risks
Evaluating Audit Evidence
Communication about Possible Fraud To Management
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