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Sixth: Auditor responsibilities related to Fraud

Auditing standards make no distinction between the auditor’s responsibilities for
searching for errors and fraud. In either case, auditor responsibilities represent:

the auditor must obtain reasonable assurance about whether the statements are
free of material misstatements whether due to fraud or errors

. this requires the following Considerations in auditing phases

Planning the audit process:

A-Understanding the client:
To determine any probable instances of committing fraud related to the client
industry

B-Understanding Internal Control:
The auditor should assess control risk by identifying internal controls and
evaluating their effectiveness in detecting and preventing misstatements
related fraud

C-Assess Risk of material misstatement
The auditor uses the understanding of the client’s industry and business
strategies, as well as the effectiveness of controls, to assess the risk of
misstatements in the financial statements related to fraud. This assessment will
then impact the audit plan and the nature, timing, and extent of audit
procedure (it`s effect on audit risk model)

Field work Phase:

Auditors must perform appropriate & correspondent audit procedures to
address fraud risk identified. to gather sufficient & Appropriate evidence

Documentation and issuing the report Phase:

▪ Auditor must document all his fraud risk assessment and his evaluation of
management mitigating actions and his evaluation of effectiveness of internal
control, upon which the specific audit procedures were chosen and applied.

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‫جميع الحقوق محفوظة ـ الإعتداء على حق المؤلف بالنسخ أو الطباعة يعرض فاعله للمسائلة القانونية‬