and instructions introduction According to the international and the UK suditing standards auditors are accountable for obtaining reasonable assurance that financial statements should be free from material misstatements (MM). However, it is not possible to detect some MM even if properly planned in accordance with ISAs as fraud is likely to be concealed (ISA 240,5), Over the last decades, many fraud and audit failures took place internationally. As for example, the 2001 Enron scandal, eventually led to the liquidation of the Enron Corporation, an American energy company, and the de-facto dissolution of Arthur Andersen, which was one of the Big Five largest international audit and accountancy firms. Based on the current context of UK, Smith, S. (Senior Manager, KPMG/UK, 2017), stated that: "Fraud is on the up and dominated by low- value cases, suggesting individuals are stealing less significant amounts of money in an attempt to avoid detection. The fact employee fraud has more than doubled in comparison to previous years is also concerning. It's a stark waming that business leaders need to be observant when it comes to keeping an eye on potential fraudulent activity in their organisations, and highlights the importance of implementing appropriate fraud prevention measures. Only by doing so will management teams be able to effectively mitigate risk and protect their business." Requirements: By referencing to auditing literature and professional standards. you are required to 1) Explain the concept of financial statements fraud, and the auditors' legal and professional responsibility: (25%) 2) Discuss A the ways auditors can recognize symptoms of fraud existence, (12.5%) B.the situations they may have difficulty in detecting existing fraud activities (12,5%). 3) Discuss the actions by auditors when they detect fraud, (25%) 4) Critically analyse the impact of fraud on audited financial statements. (20%) 5) Presentation & referencing (5%)