ISA 240 sets out the Auditors responsibility to consider fraud in the financial statements and under this standard the auditor has a responsibility to consider the risk of material misstatement due to fraud. The auditor has to do this at the planning stage of the audit, discussing the matter with the engagement team and documenting that discussion. The auditor must perform the audit with professional skepticism and if a fraud is discovered then the audit may well be seen as higher risk and more testing required.

Task assigned:

Critically discuss and evaluate the fraud risk assessment and how the outcomes of risk assessment influence the audit planning phase.

You must support your discussion from past studies andempirical evidence reported in the journal articles preferably from the publisher of Elsevier, Emerald or Taylor & Francis; or professional journals such as articles issued by the CPA, or the American Accounting Association. Supporting your argument with unpublished journal articles are strictly prohibited.

2000+ words are necessary