Taxmann's Analysis | Fraud Risk in Audits – Common Shortcomings and How to Address Them Under SA 240

Fraud Risk in Audits

Common Shortcomings and How to Address Them Under SA 240

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Taxmann's Analysis | Fraud Risk in Audits – Common Shortcomings and How to Address Them Under SA 240

Published on Jul 7, 2025

The article discusses key shortcomings observed during audit quality reviews, particularly in the context of fraud risk and compliance with SA 240. It highlights how insufficient documentation, lack of tailored assessments, and generic planning can severely compromise audit integrity. The common pitfalls in fraud risk audits, include: ‣ Inadequate Documentation and Incomplete Management Representation ‣ Failure to Identify and Assess Risks of Material Misstatement Due to Fraud ‣ Absence of Engagement Team Discussions on Fraud Risk ‣ No Testing for Management Override of Controls ‣ Inadequate Procedures Over Revenue Recognition ‣ Audit Plan Lacked Fraud Focus

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Taxmann's Analysis | Fraud Risk in Audits – Common Shortcomings and How to Address Them Under SA 240 by Taxmann - Issuu