Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p161
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 502439–505682

is, not related to one disclosure or assertion, or a few disclosures or assertions).

 1.       Designing and performing overall responses may include:

           * Assigning and supervising personnel, considering the knowledge, skill and ability of the individuals to be given significant engagement responsibilities, and the practitioner's risk assessment procedures.

           * Conducting more procedures as of the period end rather than at an interim date.

           * Obtaining more extensive evidence from procedures other than tests of controls.

           * Increasing sample sizes and the extent of procedures, such as the number of facilities at which procedures are performed.

           * Incorporating an element of unpredictability in the selection of the nature, timing and extent of procedures.

Responding to Identified or Suspected Fraud or Non-Compliance with Laws and Regulations (Ref: Para. 129–131)

 1.       The risk of not detecting a material misstatement due to fraud or non-compliance with laws and regulations is higher than the risk of not detecting one resulting from error.  Furthermore, the risk of not detecting fraud or suspected fraud or non-compliance or suspected non-compliance with laws and regulations is higher in a limited assurance engagement than in a reasonable assurance engagement.  The appropriate response to fraud or suspected fraud or non-compliance or suspected non-compliance with laws and regulations is dependent on the circumstances.

 2.       Responding appropriately to identified or suspected fraud or non-compliance with laws and regulations, identified during the engagement, may include taking action, such as:

           * Discussing the matter with the entity.

           * Requesting the entity to consult with an appropriately qualified third party, such as the entity's legal counsel or a regulator.

           * Inspecting correspondence, if any, with the relevant licensing or regulatory authorities.

           * Considering the implications of the matter in relation to other aspects of the engagement, including the practitioner's risk assessment and the reliability of written representations from the entity.

           * Obtaining legal advice about the consequences of different courses of action.

           * Withholding the assurance report.

           * Withdrawing from the engagement.

 1.       In determining the appropriate level of management or those charged with governance, with whom to communicate instances of fraud or suspected fraud or non-compliance or suspected non-compliance with laws and regulations, the practitioner may consider whether management may have been involved in the fraud or suspected fraud or identified or suspected non-compliance with laws and regulations and whether any of those charged with governance are involved in managing the entity. If those charged with governance are not involved with managing the entity, the practitioner may communicate to them instances of fraud or suspected fraud or non-compliance or suspected non-compliance with laws and regulations involving management, employees who have significant roles in internal control, or where the fraud or non-compliance with laws and regulations