Issue: Special Issue № 1, 2022
Doi: https://doi.org/10.37634/efp.2022.1sp.1
Today, the quite actual issue is the identification and assessment of fraud’s risks by an auditor in his audit activity performing. Fraud’s risk assessment is aimed at proactively eliminating business vulnerability to internal and external fraud. For an effective assessment, it is worth paying attention to the International Standards on Auditing (ISA), in particular ISA 200, ISA 240 and ISA 315, which provide the main qualifying fraud’s indicators and methods of their detection. In the audit performing the leading place is occupied by the correct assessment of the management personnel’s response on fraud’s risk factors, because such factors acquire real determinants of misconduct as a result of their assessment by specific subjects from among management personnel. That is why, in these methodological recommendations, it is proposed to consider the key questions for an auditor 's effective assessment of management personnel's response on fraud’s risk factors, which include nine consecutive points. Based on such knowledge, an auditor can express a hypothetical judgment based on professional skepticism on the presence of version fraud. They are subject of verification by obtaining relevant evidence that confirms or refutes them. If the fact of fraud is discovered, it should be noted that an auditor is not authorized to provide the official legal opinion. But he is obliged to report the discovered distortions of financial statements due to fraud to the highest management and law enforcement authorities. An auditor's procedure for detecting and assessing fraud’s risks should also be considered. This procedure includes six main stages, which are divided into stages only conditionally, since the performing the audit procedures is interconnected and can be carried out at different stages. This procedure includes acceptance of the client, planning of the general strategy and general audit plan, risk assessment (intertwined with the general strategy), detailed audit plan, performance of substantive audit procedures and analysis of detected distortions, final procedures.
Keywords : management staff behavior, professional skepticism, professional judgment of an auditor, audit, fraud, legal assessment, distortion of financial statements
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