What’s changing?
High-quality audits support the smooth functioning of capital markets. The public interest is best served when everyone in the financial reporting system has confidence in audits. In recent years, high-profile international corporate failures and significant accounting restatements have put a spotlight on those who are involved in the preparation, approval, audit, analysis, and use of financial reports, particularly in the area of fraud. Because of this, the International Auditing and Assurance Standards Board (IAASB) is revising International Standard on Auditing (ISA) 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. In Canada we adopt these international standards as Canadian Auditing Standards (CAS) – so any changes made to the ISAs will apply to audits in Canada as well.
The changes will:
- be clear on the auditor’s responsibilities about fraud in financial statement audits;
- strengthen the auditor’s procedures; and
- include more detail about fraud in the auditor’s report.
These changes apply to all financial statement audits.
Not all the current requirements of CAS 240 are changing – in some cases, application material or examples have been enhanced or added.
Learn about the key changes below. A detailed explanation of all the changes is included in the IAASB’s Explanatory Memo.
If you’re a practitioner, management, those charged with governance or a financial statement user, see how the changes impact you!