Higher Institutions' Centre of Excellence MALAYSIA: Driving Research in Islamic Financial Criminology
& WINNERS OF GLOBAL ISLAMIC FINANCE AWARDS 2014,2015, 2016 & 2017; ACQ GLOBAL AWARDS 2015 & 2016 and ASEAN Risk Management Award 2016 & 2017; Global Good Governance Awards 2017
Saturday, October 27, 2012
ISA 240
Whilst the “rules-based” SAS 99 is enforceable
in the United States of America, elsewhere, the International Federation of
Accountants (IFAC), a global
accountancy organizationissuessimilar standard
- the International Standard on Auditing 240 (ISA 240) which focuses on “The Auditor’s Responsibilities Relating to Fraud
in an Audit of Financial Statements”.ISA 240 is “principle-based”, which means that the standard provides a
conceptual basis for auditors to follow instead of detailed rules.Under principles-based approach, the standard
lays out the key objectives, then relate the auditor’s “responsibility to fraud
when auditing financial statement” to some common examples.Some elements of judgments are allowed to be
exercised by the auditors. In the case of ISA 240 on “The Auditor’s
Responsibilities Relating to Fraud in an Audit of Financial Statements”, the
standard outlines eleven
key responsibilities that auditors should consider: Characteristics ofFraud; Professional Skepticism; Discussion among the Engagement Team; Risk Assessment Procedures and Related Activities; Identification and Assessment of the Risks of Material
Misstatement Due to Fraud; Responses to the Assessed Risks of Material Misstatement Due to
Fraud; Evaluation of
Audit Evidence; Inability of Auditor to Continue the Audit Engagement; Written Representations; Communications to Management and with those Charged with
Governance and Communications to Regulatory and
Enforcement Authorities
Whilst the “rules-based” SAS 99 is enforceable
in the United States of America, elsewhere, the International Federation of
Accountants (IFAC), a global
accountancy organization issues similar standard
- the International Standard on Auditing 240 (ISA 240) which focuses on “The Auditor’s Responsibilities Relating to Fraud
in an Audit of Financial Statements”.
ISA 240 is “principle-based”, which means that the standard provides a
conceptual basis for auditors to follow instead of detailed rules. Under principles-based approach, the standard
lays out the key objectives, then relate the auditor’s “responsibility to fraud
when auditing financial statement” to some common examples. Some elements of judgments are allowed to be
exercised by the auditors. In the case of ISA 240 on “The Auditor’s
Responsibilities Relating to Fraud in an Audit of Financial Statements”, the
standard outlines eleven
key responsibilities that auditors should consider:
Characteristics of Fraud;
Professional Skepticism; Discussion among the Engagement Team; Risk Assessment Procedures and Related Activities; Identification and Assessment of the Risks of Material
Misstatement Due to Fraud; Responses to the Assessed Risks of Material Misstatement Due to
Fraud; Evaluation of
Audit Evidence; Inability of Auditor to Continue the Audit Engagement; Written Representations;
Communications to Management and with those Charged with
Governance and Communications to Regulatory and
Enforcement Authorities
