The CCAQ is generally supportive of the proposals in CAS 240, The Auditor’s Responsibilities Related to Fraud in an Audit of Financial Statements and believe most of the new guidance will enhance audit quality. We do, however, have concerns relating to:
- whether the proposed wording expands an auditor’s responsibilities beyond the scope currently required in CAS 250, Consideration of Laws and Regulations in an Audit of Financial Statements;
- whether the proposed changes in the definition of a key audit matter (KAM) could widen the expectations gap over the auditor’s role, and may result in inconsistencies between other disclosure documents and KAMs;
- whether the proposed wording would cause confusing to the user if a fraud is disclosed in a press release, or the MD&A, however the auditor reports that there are no key audit matters to communicate related to fraud; and
- whether scalability has been properly considered for private companies or entities listed on the TSX-V.
Please download a copy of our comment letter to the AASB.