Document ID: chunk:federal_register_of_legislation:F2023C01124:reg:17:p2
Version: federal_register_of_legislation:F2023C01124
Segment Type: reg
Provision Reference: reg 17 (pt 2/41)
Character Range: 14788–17834

This Auditing Standard incorporates terminology and definitions used in Australia.

The equivalent requirements and related application and other explanatory material included in ISA 240 in respect of "relevant ethical requirements", have been included in Auditing Standard, ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements. There is no international equivalent to ASA 102.

Compliance with this Auditing Standard enables compliance with ISA 240.

Auditing Standard ASA 240

The Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.

This compiled version of ASA 240 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 27 April 2022 (see Compilation Details).

Auditing Standard ASA 240

The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report

Application

Aus 0.1 This Auditing Standard applies to:

(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and

(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.

Aus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.

Operative Date

Aus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2010.  [Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.]

Introduction

Scope of this Auditing Standard

      1. This Auditing Standard deals with the auditor's responsibilities relating to fraud in an audit of a financial report.  Specifically, it expands on how ASA 315[1] and ASA 330[2] are to be applied in relation to risks of material misstatement due to fraud.

Characteristics of Fraud

2.                   Misstatements in the financial report can arise from either fraud or error.  The distinguishing factor between fraud and error is whether the underlying action that results in the misstatement of the financial report is intentional or unintentional.

3.                   Although fraud is a broad legal concept, for the purposes of the Australian Auditing Standards, the auditor is concerned with fraud that causes a material misstatement in the financial report.  Two types of intentional misstatements are relevant to the auditor – misstatements resulting from fraudulent financial reporting and misstatements resulting from misappropriation of assets.  Although the auditor may suspect or, in rare cases, identify the occurrence of fraud, the auditor does not make legal determinations of whether fraud has actually occurred.  (Ref: Para. A1‑A7)