04-21-2009, 01:35 AM
according ISA-240 the only Duty of auditor regarding Fraud is that the external auditor should make sure that Fraud which is committed is properly reflected in Financial statements and if there is an error, then it should be corrected.
Originally it is the duty of Management(internal auditor in particular) to prevent or detect and correct Fraud and inform External auditor about any known past fraud.
If the fraud is committed by only one director, then material or immaterial it should be comunicated to Those charged with governance but if it involves all those charge with governance then it should be communicated to legal authority by the auditor after consulting the situation with his lawyer.
Hope that'll answer ur query.
Salman
Originally it is the duty of Management(internal auditor in particular) to prevent or detect and correct Fraud and inform External auditor about any known past fraud.
If the fraud is committed by only one director, then material or immaterial it should be comunicated to Those charged with governance but if it involves all those charge with governance then it should be communicated to legal authority by the auditor after consulting the situation with his lawyer.
Hope that'll answer ur query.
Salman
