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As the name indicates, the purpose of this AAS is to establish standards on the auditor's responsibility to consider fraud and error in an audit of financial statements. The following would gives an overview of the contents of the AAS:

  • Fraud and error and their characteristics

  • Responsibility of those charged with governance

  • Responsibility of management

  • Responsibility of the auditor

  • Indication of possible misstatement

  • Evaluation and disposition of misstatements.

  • Effect on auditor's report

  • Documentation

  • Management representations

  • Communication

  • Auditor unable to complete engagement

    The appendices to the AAS contain examples of risk factors relating to misstatements resulting from fraud/ error, examples of modifications in auditor's procedures, and indicators of possible fraud or error.

    The AAS is effective for all audits relating to accounting periods beginning on or after April 1, 2003.

Issued in January, 2003
Published in the Handbook of Auditing Pronouncements, Vol. I, (Edn. 2003).
Also available as a separate publication of the Institute (Price: Rs. 30/-).
ISBN: 81-88437-11-5.

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