Auditing standards review. Management fraud (fraudulent
financial reporting) is not the expected norm, but it happens from time to
time. In the United States, several cases have been widely publicized. They
happen when motives and opportunities overwhelm managerial integrity.
What distinguishes management fraud from a
What are an auditorâ€™s responsibilities under
auditing standards to detect management fraud?
What are some characteristics of management
fraud that an audit team should consider to fulfill the responsibilities under
What factors might an audit team notice that
should heighten the concern about the existence of management fraud?
Under what circumstances might an audit team
have a duty to disclose managementâ€™s fraud to parties other than the companyâ€™s
management and its board of directors?
Internal Control Audit Standards. Auditors are required to
obtain a sufficient understanding of each component of a clientâ€™s internal
control. This understanding is used to assess control risk and plan the audit
of the clientâ€™s financial statements.
For what purposes should an auditorsâ€™
understanding of the internal control components be used in planning an audit?
What is required for an audit team to assess
control risk below the maximum level?
What should an audit team consider when seeking
to reduce the planned assessed level of control risk below the maximum?