Recognize fraud risks, challenge management assertions, and build an audit response that meets the PCAOB auditing standard requirements.

Fraud risk cannot be addressed with a checklist at the end of an audit. PCAOB auditing standards require auditors to consider the risk of material misstatement due to fraud throughout the engagement—from client acceptance and audit planning through risk assessment, testing, evaluation of audit results, and communication of findings.

This two-CPE webinar provides a practical review of PCAOB Auditing Standard AS 2401, Consideration of Fraud in a Financial Statement Audit. Attendees will examine the auditor’s responsibilities for identifying, assessing, and responding to fraud risks during an audit of financial statements.

The course distinguishes fraudulent financial reporting from misappropriation of assets and explains how incentives and pressures, opportunities, and attitudes or rationalizations may create fraud risk. Special attention is given to management override, revenue recognition, journal-entry testing, accounting estimates, unusual transactions, and the auditor’s response when fraud may have occurred.

The webinar is based on the current requirements of PCAOB Auditing Standard 2401.

Major Subjects

The auditor’s responsibility for detecting material misstatement caused by fraud
Fraudulent financial reporting and asset misappropriation
The fraud triangle and fraud risk factors
Professional skepticism during the audit
Engagement-team brainstorming and fraud discussions
Required inquiries of management and others
Considering the risk of management override
The presumed fraud risk involving revenue recognition
Testing journal entries and other financial-statement adjustments
Reviewing accounting estimates for potential management bias
Evaluating significant unusual transactions
Responding to identified and assessed fraud risks
Revising the fraud risk assessment as audit evidence develops
Evaluating misstatements and other indications of possible fraud
Communicating fraud to management, the audit committee, and other parties
Fraud-related audit documentation requirements

Why Attend?

Fraud is deliberately concealed. It may involve falsified documentation, collusion, intentional omissions, management override of controls, or misleading representations to the auditor.

PCAOB AS 2401 requires more than simply asking management whether fraud has occurred. Auditors must incorporate fraud considerations into their risk assessment, design responsive audit procedures, critically evaluate audit evidence, and communicate suspected or identified fraud to the appropriate parties.

This webinar will help audit professionals understand what the standard requires and how to translate those requirements into defensible audit procedures and documentation.

Fraud consideration is an ongoing audit responsibility—not a single planning procedure. Auditors must remain alert to fraud risks throughout the engagement and adjust their procedures when new or contradictory evidence emerges.

This webinar gives audit professionals a focused, practical understanding of PCAOB AS 2401 and the procedures necessary to identify, assess, respond to, document, and communicate fraud risks in a financial statement audit.

PCAOB AS 2401: Consideration of Fraud in a Financial Statement Audit

Name: PCAOB AS 2401: Consideration of Fraud in a Financial Statement Audit
Brand: PCAOB-CPA-Firm

$140.00

Dates Available

Quantity

Offered every eight weeks on Tuesdays at 10:00 a.m. to 12:00 noon Central Time in four CPE-Credit event.

We can schedule private events on your timetable for two or more attendees.

NASBA Program Disclosure

Program Level of Understanding: Basic

Prerequisites: None

Advance Preparation: None

Delivery Format: Seminar (Group Internet Based)

NASBA Field(s) of Study: Auditing, Information Technology

CPE Credits: 2, based on 50 minutes of instruction per hour
Fraud Risk Assessment

Participants will learn how fraud considerations should be integrated into the auditor’s understanding of the company, its environment, internal control, and financial reporting process.

Management Override

Because management may be able to manipulate accounting records or override otherwise effective controls, AS 2401 requires specific procedures addressing this risk. The webinar examines journal entries, estimates, unusual transactions, and other potential override techniques.

Revenue Recognition

The course explains the standard’s presumption that improper revenue recognition represents a fraud risk and the documentation expected when an auditor concludes that this presumed risk does not apply.

Audit Evidence and Warning Signs

Attendees will examine conditions that may indicate fraud, including conflicting evidence, missing documentation, unusual transactions, evasive responses, unexplained accounting adjustments, and difficult relationships with management.

Communication and Documentation

The webinar addresses whom the auditor should notify when fraud may exist and what must be documented to demonstrate compliance with PCAOB requirements.
Upon completing this webinar, participants should be able to:

Explain the auditor’s responsibilities for considering fraud in a financial statement audit.

Distinguish fraudulent financial reporting from the misappropriation of assets.

Identify fraud risk factors involving incentives or pressures, opportunities, and attitudes or rationalizations.

Conduct and document an effective engagement-team fraud discussion.

Identify information that should be obtained from management, the audit committee, internal auditors, and other personnel.

Evaluate the presumed fraud risk involving revenue recognition.

Design procedures addressing the risk of management override of controls.

Apply AS 2401 requirements to journal entries, accounting estimates, and significant unusual transactions.

Evaluate audit evidence that may indicate fraud.

Identify required communications when fraud or suspected fraud is discovered.
What is PCAOB Auditing Standard 2401?

PCAOB AS 2401 establishes requirements and provides direction concerning an auditor’s consideration of fraud during an audit of financial statements.

Does PCAOB Auditing Standard 2401 require auditors to find every fraud?

No. The auditor’s objective is to obtain reasonable assurance that the financial statements are free of material misstatement, whether caused by error or fraud. Fraud can be more difficult to detect because it may involve concealment, collusion, falsified documentation, or management override.

Is revenue recognition always considered a fraud risk?

PCAOB Auditing Standard 2401 includes a presumption that improper revenue recognition is a fraud risk. If the auditor determines that this presumed risk does not apply in a particular engagement, that conclusion must be supported and documented.

Does the course address journal-entry testing?

Yes. The webinar covers the auditor’s responsibility to test journal entries and other adjustments as part of the response to the risk of management override.

PCAOB AS 2401: Consideration of Fraud in a Financial Statement Audit

Details on Event Presentation

CPE Event Highlights

Learning Objectives

Key Issues on the Agenda