SAS No. 122, AU 240, Consideration of Fraud In A Financial Statement Audit requires that when a CPA is performing a financial statement audit, they must plan and perform their audit in such a manner that it will detect a material misstatement of the financial statements. This presentation is not an overview of AU 240, rather it’s a descriptive Where The Rubber Meets The Road. What are some of the actual procedures that should be performed; who do you need to talk to (that you have probably never spoken to before); how to talk to individuals (you can’t talk to everyone the same or you won’t get the information you are looking for); what type of person does it take to be a successful fraud auditor (not everybody can be a good fraud examiner); how management appears to encourage fraud; how society encourages fraud; the importance of internal controls that limit risks; the concept of the Perception of Detection; and the importance of the control environment in deterring risks. Changes are, after viewing this presentation, you will never look at an audit the same.
External and Internal Auditors, Fraud Examiners