At its meeting on September 12-16, 2022, the IAASB discussed, and was supportive of, the Fraud Task Force’s drafting with respect to the sections in proposed ISA 240 (Revised) that refer to, or expand on, ISA 315 (Revised 2019). The Board also discussed the Task Force’s proposals in relation to transparency in the auditor’s report and provided feedback on the way forward. The Board generally agreed to have more transparency about fraud in the auditor’s report. The Board: (i) agreed that the auditor’s communications on fraud should be included in a separate section in the auditor’s report; (ii) generally agreed that the auditor’s responsibilities as they relate to fraud in the audit of the financial statements should be enhanced in the auditor’s report; (iii) had mixed views on whether the identified and assessed fraud risks and the auditor’s response to the assessed risks should be communicated in the auditor’s report. The Board asked the Fraud Task Force to explore a mechanism similar to key audit matters and including a ‘filter’ to only communicate the most significant fraud risks; (iv) had mixed views on including the identified significant deficiencies in internal control that are relevant to the prevention and detection of fraud in the financial statements in the auditor’s report. The Board asked the Fraud Task Force to further explore this communication by taking into account the views of users of the financial statements and the concerns the Board raised; and (v) agreed that the proposed changes to the auditor’ report should only apply to listed entities or Public Interest Entities. In December 2022, the Fraud Task Force will bring drafting for various topics to the Board for further deliberation.

Review the summary, including the podcast, on the IAASB's Web site.