Obtaining a Copy of this Auditing Standa
Obtaining a Copy of this Auditing Standard
Obtaining a Copy of this Auditing Standard
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
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Commonwealth legislation
ASA 240 sets auditors’ required approach to detecting fraud in audits of financial reports, obliging auditors to apply heightened professional scepticism, unpredictable procedures and modern tools (eg data analytics). It affects auditors, company management and those charged with governance by shaping inquiries, evidence-gathering and communications.
The standard matters because it makes audit work more robust against fraud and includes Australia-specific rules on ASIC notifications/consent to resign and whistleblower confidentiality.
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Direct links to the current provisions in Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report (October 2025).
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPhone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2025 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Any decision to approve a request may also require the agreement of IFAC.
ISSN 1030-603X
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Paragraphs
Application......................................................Aus 0.1-Aus 0.2
Operative Date.........................................................Aus 0.3
Introduction
Scope of this Auditing Standard..................................................1
Responsibilities of the Auditor, Management and Those Charged with Governance............2-3
Key Concepts in this ASA....................................................4-14
Relationship with Other ASAs...................................................15
Effective Date..............................................................16
Objectives.................................................................17
Definitions................................................................18
Requirements
Professional Scepticism.....................................................19-22
Engagement Resources........................................................23
Engagement Performance......................................................24
Ongoing Nature of Communications with Management and Those Charged with Governance.....25
Risk Assessment Procedures and Related Activities.................................26-30
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control 31-37
Evaluation of Fraud Risk Factors.................................................38
Identifying and Assessing the Risks of Material Misstatement due to Fraud................39-41
Responses to the Assessed Risks of Material Misstatement Due to Fraud..................42-53
Overall Evaluation Based on Audit Procedures Performed...............................54
Fraud or Suspected Fraud....................................................55-58
Auditor Unable to Continue the Audit Engagement....................................59
Auditor’s Report..........................................................60-62
Written Representations.......................................................63
Communications with Management and Those Charged with Governance.................64-66
Reporting to an Appropriate Authority Outside the Entity...............................67
Documentation..............................................................68
Application and Other Explanatory Material
Responsibilities of the Auditor, Management and Those Charged with Governance............A1
Key Concepts in this ASA.................................................A2-A17
Relationship with Other ASAs.................................................A18
Definitions............................................................A19-A26
Professional Scepticism..................................................A27-A37
Engagement Resources...................................................A38-A42
Engagement Performance.....................................................A43
Ongoing Nature of Communications with Management and Those Charged with GovernanceA44-A48
Risk Assessment Procedures and Related Activities..............................A49-A60
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control A61-A109
Evaluation of Fraud Risk Factors..........................................A110-A112
Identifying and Assessing the Risks of Material Misstatement due to Fraud...........A113-A125
Responses to the Assessed Risks of Material Misstatement Due to Fraud.............A126-A155
Fraud or Suspected Fraud...............................................A156-A172
Auditor Unable to Continue the Audit Engagement.............................A173-A176
Auditor’s Report......................................................A177-A192
Written Representations................................................A193-A194
Communications with Management and Those Charged with Governance............A195-A200
Reporting to an Appropriate Authority Outside the Entity........................A201-A205
Documentation...........................................................A206
Appendix 1: Examples of Fraud Risk Factors
Appendix 2: Examples of Possible Audit Procedures to Address the Assessed Risks of Material Misstatement Due to Fraud
Appendix 3: Examples of Circumstances that May Be Indicative of Fraud or Suspected Fraud
Appendix 4: Additional Considerations that May Inform the Auditor When Selecting Journal Entries and Other Adjustments for Testing
Appendix 5: Other ASAs Addressing Specific Topics that Reference Fraud or Suspected Fraud
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPhone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2025 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Any decision to approve a request may also require the agreement of IFAC.
ISSN 1030-603X
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Paragraphs
Application......................................................Aus 0.1-Aus 0.2
Operative Date.........................................................Aus 0.3
Introduction
Scope of this Auditing Standard..................................................1
Responsibilities of the Auditor, Management and Those Charged with Governance............2-3
Key Concepts in this ASA....................................................4-14
Relationship with Other ASAs...................................................15
Effective Date..............................................................16
Objectives.................................................................17
Definitions................................................................18
Requirements
Professional Scepticism.....................................................19-22
Engagement Resources........................................................23
Engagement Performance......................................................24
Ongoing Nature of Communications with Management and Those Charged with Governance.....25
Risk Assessment Procedures and Related Activities.................................26-30
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control 31-37
Evaluation of Fraud Risk Factors.................................................38
Identifying and Assessing the Risks of Material Misstatement due to Fraud................39-41
Responses to the Assessed Risks of Material Misstatement Due to Fraud..................42-53
Overall Evaluation Based on Audit Procedures Performed...............................54
Fraud or Suspected Fraud....................................................55-58
Auditor Unable to Continue the Audit Engagement....................................59
Auditor’s Report..........................................................60-62
Written Representations.......................................................63
Communications with Management and Those Charged with Governance.................64-66
Reporting to an Appropriate Authority Outside the Entity...............................67
Documentation..............................................................68
Application and Other Explanatory Material
Responsibilities of the Auditor, Management and Those Charged with Governance............A1
Key Concepts in this ASA.................................................A2-A17
Relationship with Other ASAs.................................................A18
Definitions............................................................A19-A26
Professional Scepticism..................................................A27-A37
Engagement Resources...................................................A38-A42
Engagement Performance.....................................................A43
Ongoing Nature of Communications with Management and Those Charged with GovernanceA44-A48
Risk Assessment Procedures and Related Activities..............................A49-A60
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control A61-A109
Evaluation of Fraud Risk Factors..........................................A110-A112
Identifying and Assessing the Risks of Material Misstatement due to Fraud...........A113-A125
Responses to the Assessed Risks of Material Misstatement Due to Fraud.............A126-A155
Fraud or Suspected Fraud...............................................A156-A172
Auditor Unable to Continue the Audit Engagement.............................A173-A176
Auditor’s Report......................................................A177-A192
Written Representations................................................A193-A194
Communications with Management and Those Charged with Governance............A195-A200
Reporting to an Appropriate Authority Outside the Entity........................A201-A205
Documentation...........................................................A206
Appendix 1: Examples of Fraud Risk Factors
Appendix 2: Examples of Possible Audit Procedures to Address the Assessed Risks of Material Misstatement Due to Fraud
Appendix 3: Examples of Circumstances that May Be Indicative of Fraud or Suspected Fraud
Appendix 4: Additional Considerations that May Inform the Auditor When Selecting Journal Entries and Other Adjustments for Testing
Appendix 5: Other ASAs Addressing Specific Topics that Reference Fraud or Suspected Fraud
The AUASB issues Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
This Auditing Standard represents the Australian equivalent of ISA 240 (Revised 2025), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements and will replace the current ASA 240 issued by the AUASB in October 2009 (as amended to 27 April 2022).
This Auditing Standard contains differences from the ISA 240 (Revised 2025), which have been made in the Application and Other Explanatory Material and Appendices to reflect Australian regulatory requirements.
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report (October 2025) pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
This Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.
Dated: 14 October 2025 D Niven
Chair - AUASB
This Auditing Standard conforms with International Standard on Auditing ISA 240 (Revised 2025), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
Paragraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.
The following application and other explanatory material is additional to ISA 240:
For an audit engagement under the Corporations Act 2001 (the Act), the possibility of withdrawing from the engagement or resigning from the appointment as an auditor can only be made in accordance with the provisions of the Act, including in certain circumstances, obtaining consent to resign from the Australian Securities and Investments Commission (ASIC). (Ref: Para. Aus A175.1).
Legislation may require the auditor or a member of the audit team to maintain the confidentiality of information disclosed to the auditor, or a member of the audit team, by a person regarding contraventions or possible contraventions of the law. In such circumstances, the auditor or a member of the audit team may be prevented from communicating that information to management or those charged with governance in order to protect the identity of the person who has disclosed confidential information that alleges a breach of the law. In such circumstances, the auditor may consider obtaining legal advice to assist in determining the appropriate course of action and may need to consider the implications for the audit engagement. (Ref: Para. Aus A195.1).
An auditor is required by the Corporations Act 2001 to notify the Australian Securities and Investments Commission (ASIC) if the auditor is aware of certain circumstances. (Ref: Para. Aus A202.1).
This Auditing Standard incorporates terminology and definitions used in Australia.
Compliance with this Auditing Standard enables compliance with ISA 240 (Revised 2025).
The AUASB issues Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
This Auditing Standard represents the Australian equivalent of ISA 240 (Revised 2025), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements and will replace the current ASA 240 issued by the AUASB in October 2009 (as amended to 27 April 2022).
This Auditing Standard contains differences from the ISA 240 (Revised 2025), which have been made in the Application and Other Explanatory Material and Appendices to reflect Australian regulatory requirements.
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report (October 2025) pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
This Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.
Dated: 14 October 2025 D Niven
Chair - AUASB
This Auditing Standard conforms with International Standard on Auditing ISA 240 (Revised 2025), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
Paragraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.
The following application and other explanatory material is additional to ISA 240:
For an audit engagement under the Corporations Act 2001 (the Act), the possibility of withdrawing from the engagement or resigning from the appointment as an auditor can only be made in accordance with the provisions of the Act, including in certain circumstances, obtaining consent to resign from the Australian Securities and Investments Commission (ASIC). (Ref: Para. Aus A175.1).
Legislation may require the auditor or a member of the audit team to maintain the confidentiality of information disclosed to the auditor, or a member of the audit team, by a person regarding contraventions or possible contraventions of the law. In such circumstances, the auditor or a member of the audit team may be prevented from communicating that information to management or those charged with governance in order to protect the identity of the person who has disclosed confidential information that alleges a breach of the law. In such circumstances, the auditor may consider obtaining legal advice to assist in determining the appropriate course of action and may need to consider the implications for the audit engagement. (Ref: Para. Aus A195.1).
An auditor is required by the Corporations Act 2001 to notify the Australian Securities and Investments Commission (ASIC) if the auditor is aware of certain circumstances. (Ref: Para. Aus A202.1).
This Auditing Standard incorporates terminology and definitions used in Australia.
Compliance with this Auditing Standard enables compliance with ISA 240 (Revised 2025).
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report (October 2025) pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
This Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.
This Auditing Standard conforms with International Standard on Auditing ISA 240 (Revised 2025), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
Paragraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.
The following application and other explanatory material is additional to ISA 240:
For an audit engagement under the Corporations Act 2001 (the Act), the possibility of withdrawing from the engagement or resigning from the appointment as an auditor can only be made in accordance with the provisions of the Act, including in certain circumstances, obtaining consent to resign from the Australian Securities and Investments Commission (ASIC). (Ref: Para. Aus A175.1).
Legislation may require the auditor or a member of the audit team to maintain the confidentiality of information disclosed to the auditor, or a member of the audit team, by a person regarding contraventions or possible contraventions of the law. In such circumstances, the auditor or a member of the audit team may be prevented from communicating that information to management or those charged with governance in order to protect the identity of the person who has disclosed confidential information that alleges a breach of the law. In such circumstances, the auditor may consider obtaining legal advice to assist in determining the appropriate course of action and may need to consider the implications for the audit engagement. (Ref: Para. Aus A195.1).
An auditor is required by the Corporations Act 2001 to notify the Australian Securities and Investments Commission (ASIC) if the auditor is aware of certain circumstances. (Ref: Para. Aus A202.1).
This Auditing Standard incorporates terminology and definitions used in Australia.
Compliance with this Auditing Standard enables compliance with ISA 240 (Revised 2025).
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPhone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2025 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to . Any decision to approve a request may also require the agreement of IFAC.
ISSN 1030-603X
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Paragraphs
Application......................................................Aus 0.1-Aus 0.2
Operative Date.........................................................Aus 0.3
Introduction
Scope of this Auditing Standard..................................................1
Responsibilities of the Auditor, Management and Those Charged with Governance............2-3
Key Concepts in this ASA....................................................4-14
Relationship with Other ASAs...................................................15
Effective Date..............................................................16
Objectives.................................................................17
Definitions................................................................18
Requirements
Professional Scepticism.....................................................19-22
Engagement Resources........................................................23
Engagement Performance......................................................24
Ongoing Nature of Communications with Management and Those Charged with Governance.....25
Risk Assessment Procedures and Related Activities.................................26-30
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control 31-37
Evaluation of Fraud Risk Factors.................................................38
Identifying and Assessing the Risks of Material Misstatement due to Fraud................39-41
Responses to the Assessed Risks of Material Misstatement Due to Fraud..................42-53
Overall Evaluation Based on Audit Procedures Performed...............................54
Fraud or Suspected Fraud....................................................55-58
Auditor Unable to Continue the Audit Engagement....................................59
Auditor’s Report..........................................................60-62
Written Representations.......................................................63
Communications with Management and Those Charged with Governance.................64-66
Reporting to an Appropriate Authority Outside the Entity...............................67
Documentation..............................................................68
Application and Other Explanatory Material
Responsibilities of the Auditor, Management and Those Charged with Governance............A1
Key Concepts in this ASA.................................................A2-A17
Relationship with Other ASAs.................................................A18
Definitions............................................................A19-A26
Professional Scepticism..................................................A27-A37
Engagement Resources...................................................A38-A42
Engagement Performance.....................................................A43
Ongoing Nature of Communications with Management and Those Charged with GovernanceA44-A48
Risk Assessment Procedures and Related Activities..............................A49-A60
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control A61-A109
Evaluation of Fraud Risk Factors..........................................A110-A112
Identifying and Assessing the Risks of Material Misstatement due to Fraud...........A113-A125
Responses to the Assessed Risks of Material Misstatement Due to Fraud.............A126-A155
Fraud or Suspected Fraud...............................................A156-A172
Auditor Unable to Continue the Audit Engagement.............................A173-A176
Auditor’s Report......................................................A177-A192
Written Representations................................................A193-A194
Communications with Management and Those Charged with Governance............A195-A200
Reporting to an Appropriate Authority Outside the Entity........................A201-A205
Documentation...........................................................A206
Appendix 1: Examples of Fraud Risk Factors
Appendix 2: Examples of Possible Audit Procedures to Address the Assessed Risks of Material Misstatement Due to Fraud
Appendix 3: Examples of Circumstances that May Be Indicative of Fraud or Suspected Fraud
Appendix 4: Additional Considerations that May Inform the Auditor When Selecting Journal Entries and Other Adjustments for Testing
Appendix 5: Other ASAs Addressing Specific Topics that Reference Fraud or Suspected Fraud
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
| Auditing and Assurance Standards BoardPhone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA |
|---|
© 2025 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).
Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
This Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.
All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.
Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Director-National, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Any decision to approve a request may also require the agreement of IFAC.
ISSN 1030-603X
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Paragraphs
Application......................................................Aus 0.1-Aus 0.2
Operative Date.........................................................Aus 0.3
Introduction
Scope of this Auditing Standard..................................................1
Responsibilities of the Auditor, Management and Those Charged with Governance............2-3
Key Concepts in this ASA....................................................4-14
Relationship with Other ASAs...................................................15
Effective Date..............................................................16
Objectives.................................................................17
Definitions................................................................18
Requirements
Professional Scepticism.....................................................19-22
Engagement Resources........................................................23
Engagement Performance......................................................24
Ongoing Nature of Communications with Management and Those Charged with Governance.....25
Risk Assessment Procedures and Related Activities.................................26-30
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control 31-37
Evaluation of Fraud Risk Factors.................................................38
Identifying and Assessing the Risks of Material Misstatement due to Fraud................39-41
Responses to the Assessed Risks of Material Misstatement Due to Fraud..................42-53
Overall Evaluation Based on Audit Procedures Performed...............................54
Fraud or Suspected Fraud....................................................55-58
Auditor Unable to Continue the Audit Engagement....................................59
Auditor’s Report..........................................................60-62
Written Representations.......................................................63
Communications with Management and Those Charged with Governance.................64-66
Reporting to an Appropriate Authority Outside the Entity...............................67
Documentation..............................................................68
Application and Other Explanatory Material
Responsibilities of the Auditor, Management and Those Charged with Governance............A1
Key Concepts in this ASA.................................................A2-A17
Relationship with Other ASAs.................................................A18
Definitions............................................................A19-A26
Professional Scepticism..................................................A27-A37
Engagement Resources...................................................A38-A42
Engagement Performance.....................................................A43
Ongoing Nature of Communications with Management and Those Charged with GovernanceA44-A48
Risk Assessment Procedures and Related Activities..............................A49-A60
Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity’s System of Internal Control A61-A109
Evaluation of Fraud Risk Factors..........................................A110-A112
Identifying and Assessing the Risks of Material Misstatement due to Fraud...........A113-A125
Responses to the Assessed Risks of Material Misstatement Due to Fraud.............A126-A155
Fraud or Suspected Fraud...............................................A156-A172
Auditor Unable to Continue the Audit Engagement.............................A173-A176
Auditor’s Report......................................................A177-A192
Written Representations................................................A193-A194
Communications with Management and Those Charged with Governance............A195-A200
Reporting to an Appropriate Authority Outside the Entity........................A201-A205
Documentation...........................................................A206
Appendix 1: Examples of Fraud Risk Factors
Appendix 2: Examples of Possible Audit Procedures to Address the Assessed Risks of Material Misstatement Due to Fraud
Appendix 3: Examples of Circumstances that May Be Indicative of Fraud or Suspected Fraud
Appendix 4: Additional Considerations that May Inform the Auditor When Selecting Journal Entries and Other Adjustments for Testing
Appendix 5: Other ASAs Addressing Specific Topics that Reference Fraud or Suspected Fraud
The AUASB issues Auditing Standard ASA 240 The Auditor's Responsibilities Relating to Fraud in an Audit of a Financial Report pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
This Auditing Standard represents the Australian equivalent of ISA 240 (Revised 2025), The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements and will replace the current ASA 240 issued by the AUASB in October 2009 (as amended to 27 April 2022).
This Auditing Standard contains differences from the ISA 240 (Revised 2025),
This is an opening excerpt, not the complete document.