IAASB clarifies expectations in fraud-related procedures

The International Auditing and Assurance Standards Board (IAASB) proposed significant strengthening of its standard on auditors' responsibilities relating to fraud. Considering recent corporate failures throughout the world, a news release said, the board proposed revisions to enhance public trust and confidence in financial reporting. 

The proposed revisions to International Standard on Auditing No. 240 (Revised), The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements, set out to define expectations in relation to "fraud, delineate more robust procedures, and increase transparency", IAASB Chair Tom Seidenstein said in the release. 

According to the release, key changes proposed include: 

• Clarified auditor responsibilities relating to fraud in an audit 

• Emphasized professional skepticism to ensure auditors remain alert to possible fraud and exercise professional skepticism throughout an audit 

• Strengthened identification and assessment of risks of material misstatement due to fraud 

• Clarified response to fraud or suspected fraud identified during the audit 

• Increased ongoing communication with management and those charged with governance about fraud 

• Increased transparency about auditors' responsibilities and fraud-related procedures in the auditor's report 

• Enhanced audit documentation requirements about fraud-related procedures 

Stakeholders are encouraged to share their insights, using the response template, on the proposed revisions by 5 June. 

The International Ethics Standards Board for Accountants (IESBA) and the International Accreditation Forum (IAF) are partnering to underpin trust in the assurance of sustainability information, a news release said. The strategic partnership aims to support the growth of transparent, relevant and trustworthy corporate sustainability disclosures. 

"The cornerstone of the partnership is the IAF's stipulation to national accreditation bodies around the world that the IESBA's proposed International Ethics Standards for Sustainability Assurance (including International Independence Standards) … are to be used when accrediting and authorizing conformity assessment bodies to carry out assurance work on corporate sustainability disclosures," the release said. 

IESBA launched the public consultation at the end of last month and expects to finalize the standards by the end of the year. 

"Trustworthy sustainability disclosures are vital in demonstrating a company's commitment to sustainability practices," IAF Chair Emanuele Riva said in the release. "Through this partnership, we strive to foster trust and confidence in sustainability reporting worldwide."