auditing and assurance service 16th edition

Assessing the risk of fraud in a financial statement audit is a difficult audit judgment. Auditing standards require the auditor to perform several audit procedures to accumulate information to assess the risk of fraud. You are the in-charge auditor responsible for planning the financial statement audit of Spence, Inc. Two new staff auditors are assisting you with the inital audit planning and have asked you the following questions.

Briefly summarize your response to the staff auditor questions:

a) what is the purpose of the audit teams's brainstorming session?

b) who should attend the brainstorming session and when should the session be held?

c) what is the role of the two staff auditors in the brainstorming session?

d) what is the auditors responsibility under auditing standards for detecting fraud?

e) what must the auditor document in the working papers related to the brainstorming session?