You are the training officer in PWC Namibia and have scheduled an induction course to a group of new trainee audit staff on the area of fraud and error. In discussion with the trainees prior to the induction programme, a number of them have stated they are aware that the issue of fraud and error is something they will likely face in the completion of their duties. They have advised that they are unsure as to what their responsibilities and those of the directors are in this area. Having reflected on this, you decide to provide them with explanatory notes with regard to audit matters pertaining to fraud and error.

REQUIREMENT:

Prepare notes for the trainee audit staff on your induction course which:

a$)$ Differentiate between the responsibilities of the auditor and the directors with respect to fraud.

b$)$ Discuss the steps that auditors should take when fraud is suspected.

c$)$ Evaluate the limitations of audit procedures in detecting fraud and error.