The AICPA expects auditors to comply with the requirements in AU-C Section 240, Consideration of Fraud in a Financial Statement Audit, when conducting financial statement audits.
Academics who perform fraud research were then asked by the AICPA’s Auditing Standards Board to conduct research related to the auditor’s identification, assessment and response to fraud risks.
The researchers identified 40 fraud-related studies published in highly regarded accounting journals between 2016 and 2022, along with several unpublished studies. The academics then published a list of best practices for auditors.
The most highlighted best practices include maintaining an attitude of professional skepticism, having a discussion among engagement team managers and improving risk assessment procedures.
Read more about these best practices for conducting financial statement audits, organized according to select requirements in AU-C Section 240.