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Chapter 83 4

2.5 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

2.6 Withdrawal from the engagement

In exceptional circumstances the auditor may consider it necessary to withdraw from
the engagement. This may be if fraud is being committed by management or those
charged with governance and therefore casts doubt over the integrity of the client
and reliability of representations from management.

The auditor should seek legal advice first as withdrawal may also require a report to
be made to the shareholders, regulators or others.

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