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IAS 240 revision questions (NBAA, C2, NOV 2018)

You are the training officer in a firm of Certified Public Accountants and you have scheduled an induction course to a group of new audit trainee staff on the area of fraud and error. On discussing with the trainees prior to the induction program, a number of them have stated that they are aware that the issue of fraud and error is something they will likely face while performing their duties. They have advised that they are unsure as to what are their responsibilities and those of the directors in these two areas. Having reflected on this, you have decided to prepare for them the explanatory notes with regard to audit matters pertaining to fraud and error.

REQUIRED:

Prepare the notes for the audit trainee staff on your induction course which:
(i) Differentiate between “the responsibilities of the auditor” and “those of the directors” with respect to fraud.
(ii) Discuss the steps that auditors should take when fraud is suspected.

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