The International Auditing and Assurance Standards Board (IAASB) has issued revisions to its standard on the auditor’s responsibilities relating to fraud in an audit of financial statements (ISA 240).
The updated standard clarifies what auditors are expected to do, introduces new requirements on professional scepticism, establishes a new section with requirements on fraud response, and includes clearer disclosures for the auditor’s report.
“These revisions directly address core public interest concerns regarding fraud,” IAASB Chair Tom Seidenstein stated. “By clarifying responsibilities, strengthening how auditors assess and respond to fraud risks, and enhancing transparency in reporting, the revised standard better supports high audit quality and delivers more decision-useful information to users of financial statements.”
The revised standard is effective for audits of financial statements for periods beginning on or after 15 December 2026.
