,,(lriIl: :

(
tr10(hr[' [))
rs^ 110
iit
rrgagenl.rlt
rs ofSPL
6rein
fmr to subnrit
o
lc
proposal a ller
it oiisl?
!6 for lht
aldit is
rhc oliginal
audit
a5 TCG.
o\tncrs
I
!
ofthe oudit
ird
ldisclosurcs.
,
I'rr,rrtr.risli(5
of ljl iturl
Lrlr!
is rrr intentionll act bJ one or morc individuals anrong nranagement- TCC- irrployees. !.r thi.d ptutics-
,,.,,
ir irr!l rhc usr: ol dcceplion to ol.rtain an urrillst or illegal adyantage.
,,,,!)PS!ol
lrlrrtiollnl llrisslalellir'N5 orc I-ratldulerll lirrarrcialleporting aud $isapproprialiolr oInssels.
.
..!',]-cl..l-!L_l!]!alls]!]!_-.1sp9ltirlg i11!,oh,cs illtentionil Dris-state rents includirs onrissions oI rnrouDls o.
,..l"srr(5
i0 lioirncinl sl lcnterlls to Jcccivc FS u5cts.
'
::rl)0!!PLii!!ion
ol issel-r irlr'olves the rheli of irn errriLl s asscts ard rs ofterr
fcrpctmted
bt
r:rttplo)ees in
. ,r
'cl!
sirirll rnd inlfltatcrial irnrounts
'i
. iruditor docs r)or nrrt:e
kgd&Eqfi!4j9!S
ol
rrlrether fraud lras actually occlllled-
r
':r!!Lrisl,
lictor5 arc cvcnts o[ condilions thilt indicalr an incnli\'e or pr?ssrre to colnrnit fraud or'Pror idc art
",.,rlullrlr
lll conullrt li a d
L\!.jl!ll!-qL-l)rcssurr
to conrnril FI:R nrav elisl $heu mafi.ge[rc[l is uncler prtssure to achieve all t\ptcled
.,-rrcinl
outconre parlicrrlarly if the consequences tlrereof lo nrauagerre[t can be signilicant. Sitniliul]-.
1
'r'.
idnirl5 rrir', Invs .!r inccotivc ro nrisapprop{iatc asscts becarrse thel are living bel ord their rreans-
\ pu'ccivcd
opporlunity to conrnrit fiaud nray cxisl
rvhen
an individual believes intemal cortrol calr ['e
-t,rrtldcrt
c.s. bccausc thc i dividral is in a position
oftrust or has kno\r,ledge ofspecific deficiurcies iu lC-
l,xjrrid
itls nra) bc rble to rationalize conrnritlirrg a fiaudulerlt act- Soure indiliduals
posstss
irn attiiude.
u,.r(ter
or sct ofclhi!al Yalucs lhat allo\v llreur krrorvirgl.r- and inlentionalll, to conrmit a disho[est acL
l'r-rrvisc
h,:it'st indiriduuls cflr conrrni( flirud in an cnvironnrent that imposes suflicie t prcssure
oI thenr.
ti6ponsilrililJ
for th! Prcl,rntion r d Detcction of Fraud
'
i
;.rirlalr
rcsponsib.lil) lbr the prcvenlion and detecliou offraud rests
rvith
TCC and nlana-!ett]ult.
i.\punsibililics
of thr. /\uditor.
'.,!irin I{A
lhar lhc l:j are liec lionr Mh4. rvhether caused
b), fraud or eror.
;i.
rsli
ol not dclcctillg a ntatefial l,risstarcllent resultirrg fiom fraud is highr because:
'
i,
r,r.l rnnl- inloNe
sophisticatrd and carrlullv olrlnized schenres dsigned to conceal it
' :,rrj rnul
bc accorrrtranicd by collusiorr
:'L
ltl!1lor's
irbrliry ro delccl a haud del'uldi
- .d
sl,illirlness
oflhe
pcrpclratol
' ;'.i lrrrlu.nc)
and r\tcnt ofmanilrtlation
_
irr
dcsrcc ofcolhrsion involved
' iL{' rclirlr\.c
sirc ol irrdividual anrotrrrts ntonipulatcd
' :
-^'se
ioritJ
olthosc ildividuals involvcd.
(
rir(
tir cs
,1 lo rJentilj,a|ld
flssl3ss thc ROI\4lvl ofthe FS due to ti.aud:
t io obl.in
SAAI rcgat'dillg
(he
assessed ROMM due to flatd
.-
'
i
o rtspond
nppropr iltcly to fraud or suspected frflrd idcntified during the audit.
I'rr(s5io'r;rl
Sccntirisnl
tr
r;rrr proiissional
sccpticisll iu accordaocc with ISA 100.
l'rudrkrt
hnanti$ Repthy
..
fEp.
Page I ol4
i, ,\rrtrttar
Alurred
q
tsA l.l0
Pagc
-l
of
Audiril1g
(illodule D)
l)iscussion a'rllong thc Engngernent Tmm
-
-lhis
discussron shall plr". p1rtisdl4rrplasi: on how and IJEE llE crriry-s FS nray be susceptible lo
drc lo iiard,tincludiog hort fiaud might occur.
- The discnssion shall occw settins aside beliefs that dE cngascmctrl teanl
lnn[ase[renl;aDd TCC are honest and have integrit]'.
ISA 2
members may have
llisli Asscsslllcnt Ploccdurcs xnd Relatcd Activilies
- The arrditorjsh:rll mahe
ilgt,ifies
ol-r:
regardins-
1ll
lVanagenicnr's assessnle[r of rhc risk llrat the FS may bc MM drE lo fiaud. inchrdilrg the natuE. e\tenl
li('qu('lcr
(1f
sr rah nssessnleots
(bt 6an;geficnt-s process for idorityirg ard responding ro dE
^slis
o[ fraud ir thc e.tit.y. incltding
sp('cific riskl of fiaud that nrnnageDent has identified or knorYs
(c,lvlanaseDrenas cornnrurricatiorr to TCG regaiding iis proc.cssts hr id.nlirying and respondilrg to the
frlud in the entitv
ld) Maurg.n'ent s cornnrunication to enlployees regardirg ils vi,e$s on h.6iness praclices and elhical
- The audiror sh.ll llrake
!rq!-tics-9-[.D-a^Eng9!!]g!!-ud-Q{h9tr
lo dddmilE $hlher lhey have kno\tledge
acru.l, susp.cred or alleged fraud atTecting the entirt-.
' Ih.'andilol shall nralie inouilies of internal aodit to &rcrmir rvhether it has kr:orvledge ofany
suspccted or alleced flaud affeclitg the entit]. and to obrain its vic$5 abq, the risks ofi"tld,
-
Tlre auditor shall oblair an underianding of hov TCG 6.rEis. oYrtsisht of managenrent's
idertif] ing rrd respoDding to the risks of fraud ir lhe erfiry .rd $c lC that manageurenl has
nriligare rhe$e risks.
-
'lhe
audiror shall [rake inquiries of TCG to deternrine n'het]|er tlre-v htve knorvledge oIary acluol,
or-itlleged im{d .ffecrirrg the entitl'.
Ln$surl or Une\pcctcd Rclationships Idcntilied
Thr atrlitor shall eval0.le $helher unlsual or uneNpecied relitionshiF thal hAve been identified in
.rralyticaIpiocedrres nray indicale ROMM due to fraird.
Ofhcr Infoirnfllior
The nrditor shlll corsider \yhe(her olh.r inlbnnatios obtained by lhe auditor indicates ROMM dtle to
t-t:rlurtion. of Frnud Risli Fictors
'l-he
a(Jitor shill evaluate Nhether the inlonratioB obtained from rhe othcr risk assess$erll
relnlcd ircti\itics perlonred indicares thar one or more fraud risk factors are present.
Id(nlification xnd Assessnrcnt of thc ROIqM Duc to Fraud
- \\'her idetrlih ing and assessiirg the ROMM due lo fi,atrd, the auditor shall, based on s presurnptior
lr'e lisLs of frcud irr revenue recognition. evaluale \yhich
lvpes
of revenue, revenue tmnsactions or
gite risc tolsuch risks
fhc nrdiror-sh.ll rreat those assessed ROMM dn:e to flaud as significant risks
Or rrnll llosponscs to thc .{sscss.d RONIM Due to Fraud
t$ srbieati\.,e or&rsrrrFnents snd coNplcri lmnsaclions. nra_,- be indi"arivp 6f FFR
(c
I hlcorpor e nn elerlelrr of ullprcdidabilitl, in the scleciion ofthc N-l'E ofnudit procedures.
llr : r\nrrrjar,.\lrn:ed
,i I
t't,
g
ld
'lsA
2
fie rratult.
e\Ielrl
entil\.,. irlcltrding
londihg
to lhe
, and cthicrl
rave knorlledqe
nledgc of arrr"
inod.
atNent 5
!rcnt hns
of arr-v actrnl,
r itlenritlerl in
ROMlvl due to
tsessrlreltt
\riJtlttrr i \ lrrLltrlc L)l
lS;\ lJ0
\r,rlil l'r-n(rJdurtJ ltcsponi rc lo Ijsli oJ ot:ln:]gcnlcnt o!,erridc ofcontrols nl the Assertior Lcrcl
'
i]l!!tg!l]!t1
is in n lrliquc positior to perpelrale fiatld because ol its abilill to mnnipulate accounting rcrorrls
;rrr.i pr rpar c I rtrdulcnt l:S br. over r iding corrtr'ols that other\-ise appear to bc opcr ati.rs el]ectivel\..
.
lii'r ir, itor slr:rlldcsign and
1:eIforr]
ardirlllocedurcs ro:
r.i' l-fl Iht ilpprop,iiltcDcsi ol .l[;s recorded irr the Ct, aod other adjustrneuts rradr: irr the preparation ofthe l:S.
i r .1r.i..lrrrng arrd pc|lblrrring audil proccdures lor srtch tesis, the auditor shall:
Ir) \lilic inquir i(5 ol-indiviLlUals inyoh.ed ilt the fR plocess abo(r iuaFpropriate or urlrsnal -lEs
trrl trlccl .lLs .Itd ollrcr adi,tst rcols trlnd. at the end ol a reportihg pet iod
lrri)
Corrsidcr llrc rced lo rcsl JEs and olher adjus(melrrs thlouglror.rr the peri,:d
\i
RL'rien irrc(iulltillg rslirnnles for I]iases and cvaluate \!hether tlle circullrslances producing the bias. il an},.
r.t,!isrnl il rsli ol-rlatcrial nrsstalclltent due to trard. ln pelfornting this rcvierv- thr auditor shall:
(r
I [\ iluate \Lh!thcr ll]e
judg0lenrs
rnd decisions for accounting estinrates iudicate a possi[rle bias
Itr) Petlbrrrr a rrlrosfecti!e levie\v oJ ilanagemelrt judg
ents aud assunrltions relaled to signitic ll
irc(ornling esttntiltes
'
lrrr sigitficrtnt lrnnsrclions thal arr outside the nornral coulse or are unusrial. thc auditor slrall eYalrratc
'l,rlllrr
lhr busiress rillionillc
(or (hc
lacli thefco0 ol_the ttalsactions su.sgesis thirt the\ nlav have been enlcred
L
'
rI! r!t ir l:l:li LI lo corrreal nlisrPplerprirtion of assets.
I urlualion ol r\urli( 0ridc cc (llct: l,srt. Al9)
I lre :ruditor shall ev0lua{e r!hclltcr
!!t[!]!qlprgcedurcs
tlrat are p-!!h[1]Sd:ll!glthe end of the audit irrditate
'
fttviousl)'un|ecognized risk ofnr.terial nrisstrterrent dus to fraud.
-
lr lic irudilor idenlilirs a llliss(atcllrellt i]rdicative of fraud. the andiior shall eyaluaie the inrplications fol
'''rhcr nsfec(s oIthc atldit
'I .lrirhr[lv ofn]0nasc ren( i epr'cseoral ion s
'
:\!.\5rne|t
ol lhc RC)Mt\1 due to fraud
'
'
l l: ol nudrt proccdulcs
\ rlil,)l
Unabl(
(o
Co,ttinuc
(hc
Eng:rgctncnt
ri I rtsult of a misslalcrlent resulting fionr frard or suspected fi-aud, the auditor eocoulteE e\cepliolal
-r,nrslatlces lhat brillg i lo qircslior the auditor's abiliN to contiruc perfornring the audit, thc auditol sllall:
Dcterlnine lhc profcssional aud legal responsibilities applicable in the circunrstances- itlcluding the
rrcrrrc[l
lorepo to the pelsolr or persons \yho nrade the audit appoilllmcnt or rcgulatory authorities:
ilorsrdcr
\\,lrether it is apllropriate to \\ ilhdra\y tjonl the enga,qement. rr.here rvithdrarval is possible rurder
.iLrla !lw ot repulalion: and
'irc
luJilor \r,ilhdra\,s:
(i) Discuss \\itlt the flppr opriate lcvel oforanaeelrrent and TCG the reasous Ior u.ithdratr,al: and
(ii) Deternrirc rvhelhcr thcrc is a prolcssio al or legal requiremeni to report to aDl.petsoll
.:
rI Rcl,r(\ttr lll Ii0 lls
- Jrio| shall obtain rrritlen represeotations fiolr ltianagetnsol and TCC thet:
:' :rcknorvlcdsc their tesponsibiliq'fol the design. illrplernentatiorr and maintenance ofirltellral conhol to
,
,
i[d dctccl fii]!td:
- ha!c discloscd lo lhc auditor thc rcsolls ol' trrana1,]etlterll's asscssment al_the risk that thr FS mn: be
. . \
nrisatnted fis I rrsult offlaud:
.,
1)irrc discloscd to thc aoditor thcil knorrledgc of frar.rd. or suspectcd frnud. it}lcting the errtit)
,r
\lanalelncnt:
i,i
) [rnployees lvho havc significant Ioles in inle(t1al cont,.ol: or
' ,
I Othcrs rvherc the fraud could have a material effect oo the FS: snd
-
r ni!c discloscd to the a!ditor thcir klo\viedge ofany allegations of &aud. or suspected [ratrd. afltctirrg
s FS cornnrunicaled by enrplol,ees, fornrer enrplbyees, aualysts. regulalors or others.
(Qf
.
{ravcl R<k Fa.rc,r:
n a pres[mption
! lmosactioos
ol
lilY ol' the
)lvtlvt tlLre to finud
!,lartictrlallt
d
roceduleS-
r.r i A lurrcd
Page 3 oi 4
,tuditing
lNlodule
D1
tsA 240
.Conrnlunic0tions
to Min!gcmcnt and Nith Those CharS.d
rYith Goltr!.!cc
-
lt lhc auditor has idenritrcd a fmud or h8s obtained
infomatioo rlBt hdi16 hat a Faud nay $ist,
the
nutliror shnll comrnunicate llre5e l,aners on a limelt basis to thc ao9r@ridc lqvtl ofmanaeement.
-
-Ilre
0uditor shnll cotilmunicate these maners lo
IEE,
ifthe auditr has idctttificd or suspects fraud involYiog:
(n)
Mancgenenl:
(tr)
llrrrplo]'ees rrho have significant rolcs in inlcrnal
conlrol; or
(c)
Others lvherc the fraud rcsults ir a nraterial misstateme in th. FS.
- l[ thc auditol suspects frattd involving management,
the auditor sh6ll codrmunicete
th*e
0rd discuss
uiitli
lheN the NTE ofaudit
procedures necessar)* lo compllc lh. audit.
- Thc auditor slrall commrnicate $ith
IeG
rn:
qthgl--Ete!9l! rtlacd to fraod that are. in lhe auditor
jn.lgrnent.
rcle!anr to their responsibilities.
Conrlllrnlcfl tiors to Reguhtorl' and Etrforccment Authorities
lf tlrc auditor hrs identilled or slspecl5 a fraud, the
EldilgEhdldggEila
\rlEthcr lhere is a rcsPonsibilitv
11:|Ort lhe occurcnce ol sr,rspiciofl to a
palq'outsidc the entity.
Documcnlation
(a)
The signi,icanr decisiors reached durilg the disr.rssion among thc cogag.rrEnl tcam regarding frard
(b)
]'h idenrified nnd assrssed ROMNI due to fraud at lhe FS le\!l rd !t lic .sstrtion leYel-
(cl
The overall rcsponses lo the assessed ROMVT duc lo fratd d lhc FS and asscrtbn leYcl
lbl The icsults ofthc audir procedures
lcl Corlrlurications lbort fiaud made ro managemant, TCG, rtgubtors and olh.rs.
(fl
lf lhe rudi(or has concluded that rhe presuNption that thrE is a ROMM drt to Fard related to
recognilion is rrot applicable ilr tlre circumslances ofihe cngagqncol, th. .Easqls fo. thal conckrsion'
IdrlitionalISA b0ol( rciding: Application
paragtaphs: 3.1, S, I l. 16. li- i0. i6. 37. 39.
't3,46.48,
54,64
Apperrdices: l- 1. 3
Ixsl pipcrs
A 1009
Q2
Duriug tlle course of audir an auditor is expec{ed to br
vigilant enough to develop
ahoul lhe propriet)_ of imponanr trnnsactions afld to detanninc
rrhdhar
or not such lrnnsaclions
appropriate business rationale.
llcquired: Brie0l desflibe the situnrions in ryhich a transaction is indicative of fra d or an attempt to
fi arrd or frrtrdulerrt rcporting. (07)
Sofic of rhe siir.rations rvhich
arc i0dic0tiyc oi ftaud or an ateolpt to conceal fiaud or lraudnlent
ltponing are as follorvs:
' Sig[ificanr tl"osoction. thar arc oursidc thc nomral coutse ofbusirrss or that othenyise appnr to be
.
Wherc a firnsactiolr appears ovcrlt.conples.
.
frlanagenrcnr has not discussed the nnture of and accounting for such tmnsactions rvith thme charged
lrr\.crnnnc.
ofthe enrit! and llrerc is inadequale documenlalion.
'
lvlilmgcnrcnt is placi[g more enrphasis on the ned for a particular sccorntilg trc0tment thon on
tl[(lcrl) ing econonics 0ftl]c hansaction.
'
l Bnsictiotrs that involve non-consolidaled relrted p{lItics,
including spcciat
purpos. otities and hsve
becn properly
ltiie\!ed or approvcd b)- those charged rvitlr governancc
ofrhe entiqr.
'
flre rr;lnsacliors
inyohe previouslv
unidrntified
retated
P[rries
or
parties
rhat do nor have the sukancc
lirtrncial
sircngrh lo suppod the transaction Nirhoirt
assistarce from lhe enriry urder audit.
.D
i"
I
I
I
N
L--
-
I
I
I
I
I
I
I
I
I
I
I
i
I
5r:a
Audiring {
rlodule
D)
ISA 240
Paqe 2 of4
i
I
t
I
l)iscussion iltong tllt Engngemcnt
Tcam
- iiiiiair","iion llutf
pra&
iarrrssb13qpbais
on lrorv and
nlnre tl: Gdiry'i Fs nray be susceptible
lo MM
drte to lialld,iituluding
lrorv fiaud might occut.
-
it. Jir.Gtion shill occur setti;rs
aside beliefs that tE cngaDc
lr r nEmbcrs
may have lhat
nr0[ascnerlt:and TCG arc hotlesl and
have inlegrilv.
fi.lld in lhe eniin
1,.1,;
Nlanrgeri.nt:s conrlr]uoicalion to emplo-Yees regarding G rir a tsls
pdirs atd ethical behaviour
-
The ardiroi slrali nrake
i.!g!!dg!914u!ragc4g
Ed-alt4
b rh-
rE
''
l'te LnoNledge of an)'
a url. srrspdcteJ or alleged fraud aiTecting
the entitl-...
-
fhe ardiror shall rnalie inouiries of idernal audil o rk*
rEb
-
b Brulcdge
oi any acluill'
suspecred or. a[esed fi*.
"**""::::]:y
*.Y **tutri*sof
frrud.
- The audiror shalt obtain an undcrstandine blhori TCG rsatis orui!
d
4cmcnt-s
processcs
-for
idenri['ing ind ..spt ain-e ro rtt. titls of n'ora in E Gd! d ] E lh
EEocrlt
has eslablished to
nritigaie rliefc risks.
- l'hc ludirdr shall nrake imoiries of TCG to deiermiE
rtr t! btG b-t+G of any achrol. srlspecled
or ttlleged iFtud iffecrirrg the entiq.
L nusu:tl or' [Jnespccted Rclationships
ldtotifiett
Thc aLrrlitorishall ivalunie
rvhether unusual o|. unexp(dtd
rdliO.rlb ! br tcn idcntified
in performing
rrrnlylicalLriocedures nray indicate ROMM due lo fr.ild.
Othcr
lnfoi'rnation
The fluditor shallcoNider \vhether olher inforDation ourid tt lb * lh ROMM drte to fratd'
llr':rlrrntiory of FIaud Risk Fdctors
'l-hr
aurlitoi shall evalualc nhelher lhe infonnation ohanEd h l. & tfot 6..snrertl
proccdnrcs and
relirlcd ircritilies
perlorrred indicates thar one or more Fard rit h
-Gltt'ltlL
the ,rrditor shill rrest rhose assessed ROMM dr:e to f-raud r s!.Hrits
Orcrall llosporrscs to thc Asscssed RONIM Duc lo Frrld
(0r
Assien hird supervise
personnel
iaking account of thc lDrl4.. fl d &lliay of the i[dividtxtls to bc
gir,rn
signilicant engagenrent responsibilities and the auditd'-s 6.sta dt ROlrrlM due to frnud
(t'l
EvahrfllL
ryh.ther
the
5elecliqp
and applicotion
of
."c{ri!E
E&b
b } grir,
poaicularly lho6e rcl0lcd.
ro subiecti\:p measrrrenrents and cofrFlex tr0[stctions. miy hc hd.ritjFfl
ic
l
lrriopoirie on elernG-rr oiuuprcdictabilitl
in the sclffi-or ofllffE rf-li
Fatdures.
,
i'
I
llr: r\urniat ,,\hmed
I