Document ID: chunk:federal_register_of_legislation:F2023C01124:reg:17:p9
Version: federal_register_of_legislation:F2023C01124
Segment Type: reg
Provision Reference: reg 17 (pt 9/41)
Character Range: 35087–38226

have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.  (Ref: Para. A49)

34.               The auditor shall determine whether, in order to respond to the identified risks of management override of controls, the auditor needs to perform other audit procedures in addition to those specifically referred to above (that is, where there are specific additional risks of management override that are not covered as part of the procedures performed to address the requirements in paragraph 33 of this Auditing Standard).

Evaluation of Audit Evidence (Ref: Para. A50)

35.               The auditor shall evaluate whether analytical procedures that are performed near the end of the audit, when forming an overall conclusion as to whether the financial report is consistent with the auditor's understanding of the entity, indicate a previously unrecognised risk of material misstatement due to fraud.  (Ref: Para. A51)

36.               If the auditor identifies a misstatement, the auditor shall evaluate whether such a misstatement is indicative of fraud.  If there is such an indication, the auditor shall evaluate the implications of the misstatement in relation to other aspects of the audit, particularly the reliability of management representations, recognising that an instance of fraud is unlikely to be an isolated occurrence.  (Ref: Para. A52)

37.               If the auditor identifies a misstatement, whether material or not, and the auditor has reason to believe that it is or may be the result of fraud and that management (in particular, senior management) is involved, the auditor shall re‑evaluate the assessment of the risks of material misstatement due to fraud and its resulting impact on the nature, timing and extent of audit procedures to respond to the assessed risks.  The auditor shall also consider whether circumstances or conditions indicate possible collusion involving employees, management or third parties when reconsidering the reliability of evidence previously obtained.  (Ref: Para. A53)

38.               If the auditor confirms that, or is unable to conclude whether, the financial report is materially misstated as a result of fraud the auditor shall evaluate the implications for the audit.  (Ref: Para. A54)

Auditor Unable to Continue the Engagement

39.               If, as a result of a misstatement resulting from fraud or suspected fraud, the auditor encounters exceptional circumstances that bring into question the auditor's ability to continue performing the audit, the auditor shall:

         (a)                Determine the professional and legal responsibilities applicable in the circumstances, including whether there is a requirement for the auditor to report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities;

         (b)                Consider whether it is appropriate to withdraw from the engagement, where withdrawal is possible under applicable law or regulation; and

         (c)                If the auditor withdraws:

             (i)                 Discuss