Page 226 - Auditing Standards

As of December 15, 2017

AS 2401: Consideration of Fraud in a Financial Statement

Audit

Guidance on AS 2401: Staff Audit Practice Alerts No. 1, No. 2, No. 5, No. 8, No. 9, No. 10, No. 12, and No.

15 and Staff Guidance for Auditors of SEC-Registered Brokers and Dealers

Summary Table of Contents

.01 Introduction and Overview

.05 Description and Characteristics of Fraud

.13 The Importance of Exercising Professional Skepticism

.51 Responses Involving the Nature, Timing, and Extent of Procedures to be Performed

.57 Audit Procedures Performed to Specifically Address the Risk of Management Override of Controls

.79 Communicating About Possible Fraud to Management, the Audit Committee, the Securities and
Exchange Commission, and Others

.83 Documenting the Auditor's Consideration of Fraud

.85 Appendix: Examples of Fraud Risk Factors

Introduction and Overview

.01 Paragraph .02 of AS 1001, Responsibilities and Functions of the Independent Auditor, states, "The
auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement, whether caused by error or fraud. [footnote
1
omitted]" This section establishes requirements and provides direction relevant to fulfilling that responsibility,
as it relates to fraud, in an audit of financial statements. 2

Note: When performing an integrated audit of financial statements and internal control over financial reporting,
refer to paragraphs .14-.15 of AS 2201, An Audit of Internal Control Over Financial Reporting That Is

Integrated with An Audit of Financial Statements, regarding fraud considerations, in addition to the fraud
consideration set forth in this section.

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