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Planning

2.3 Responses to assessed risks

 Obtain written representation from management that they have informed the
auditor of all known or suspected frauds.

 Test year-end journals and adjustments as these may be used to manipulate
the figures in the financial statements.

 Test accounting estimates and areas of management judgment for
reasonableness.

 Make audit procedures unpredictable so the client cannot hide fraud in areas
the auditor is not expected to test.

 Use suitably experienced staff to audit areas of particular risk.

There is an unavoidable risk that some material misstatements may not be detected
even if properly planned in accordance with ISAs as fraud is likely to be concealed.

2.4 Reporting of fraud

Those
rd
Management charged with 3 parties Shareholders
governance

Communicate If the suspected If there is a By modifying the
the fraud on a fraud involves duty to
timely basis management report auditor’s opinion

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