Document ID: chunk:federal_register_of_legislation:F2017L01179:body:0:p6
Version: federal_register_of_legislation:F2017L01179
Segment Type: other
Provision Reference: 
Character Range: 15442–18701

identified or suspects fraud involving:

(a)                management;

(b)                employees who have significant roles in internal control; or

(c)                others where the fraud results in a material misstatement in the financial report,

    the auditor shall communicate these matters withto those charged with governance on a timely basis. If the auditor suspects fraud involving management, the auditor shall communicate these suspicions withto those charged with governance and discuss with them the nature, timing and extent of audit procedures necessary to complete the audit. Such communications with those charged with governance are required unless the communication is prohibited by law or regulation. (Ref: Para. A61, A63A60 -A65A63)

24.               Existing paragraph 42 is amended to read as follows:

    The auditor shall communicate, unless prohibited by law or regulation, with those charged with governance any other matters related to fraud that are, in the auditor's judgement, relevant to their responsibilities.  (Ref: Para. A66A64)

25.               The heading above existing paragraph 43 is amended to read as follows:

    Communications to Regulatory and Enforcement AuthoritiesReporting Fraud to an Appropriate Authority Outside the Entity

26.               Existing paragraph 43 is amended to read as follows:

    If the auditor has identified or suspects a fraud, the auditor shall determine whether law, regulation or relevant ethical requirements:there is a responsibility to report the occurrence or suspicion to a party outside the entity.  Although the auditor's professional duty to maintain the confidentiality of client information may preclude such reporting, the auditor's legal responsibilities may override the duty of confidentiality in some circumstances.  (Ref: Para. A6765–A6867)

(a)                Require the auditor to report to an appropriate authority outside the entity.

(b)                Establish responsibilities under which reporting to an appropriate authority outside the entity may be appropriate in the circumstances.

27.               New headings are inserted after existing paragraph A5 as follows:

    Responsibility for the Prevention and Detection of Fraud

    Responsibilities of the Auditor (Ref: Para. 9)

28.               A new paragraph after existing paragraph A5 (and new heading) is inserted as follows:

    Law, regulation or relevant ethical requirements may require the auditor to perform additional procedures and take further actions. For example, the APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board requires the auditor to take steps to respond to identified or suspected non‑compliance with laws and regulations and determine whether further action is needed. Such steps may include the communication of identified or suspected non‑compliance with laws and regulations to other auditors within a group, including a group engagement partner, component auditors or other auditors performing work at components of a group for purposes other than the audit of the group financial report. [5]

29.               Existing Footnote 14 to existing paragraph A9 is amended to read as