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The primary responsibility for dealing with fraud and going concern lies within the company, not with the auditor
The auditor’s ability to exercise professional judgment is of high importance for the audit quality, states FAR in its consultation response to IAASB’s Discussion Paper on Fraud and Going Concern in an Audit of Financial Statements.
FAR welcomes the initiative IAASB, International Auditing and Assurance Standards Board, has taken to gather perspectives from stakeholders about the role of the auditor in relation to fraud and going concern. Fraud and going concern are two important areas for auditors to form an opinion about in an audit of financial statements. These areas have also been subject to frequent discussions in the recent debates related to what is referred to as corporate collapses and scandals.
FAR wants to emphasize that the primary responsibility for dealing with fraud and going concern lies within the company, its management and those charged with governance. FAR’s view is that there should be no shift of this responsibility to the auditor.
It is important to remember, that companies should have several lines of defence in place to effectively prevent and detect fraud. Management should, with the oversight of those charged with governance, place a strong emphasis on fraud prevention. The objectives of the auditor are according to ISA 240 paragraph 11 to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks and to respond appropriately to fraud and suspected fraud identified during the audit.
If these lines of defence work effectively and carry out their respective responsibilities, we believe that the possibility to prevent and detect fraud increases.
FAR is also of the strong opinion that the audit standards should be principles based and that it would be unfortunate if they would become more rule based.
“The auditor’s ability to exercise professional judgment is of high importance for the audit quality”, FAR states in its response to IAASB.
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FAR är en branschorganisation inom redovisning, revision och rådgivning, och är ett av Sveriges största privata utbildningsföretag inom ekonomiområdet med cirka 300 årliga utbildningstillfällen.
FAR har cirka 5 000 medlemmar och cirka 1 000 anslutna medlemsföretag. FAR:s medlemmar är auktoriserade revisorer, redovisningskonsulter, skatterådgivare, lönekonsulter och specialister samt små och stora företag inom redovisning, revision och rådgivning.
FAR hjälper branschen att göra nytta för näringsliv och samhälle. FAR:s uppdrag från medlemmarna är att klargöra god yrkessed, paketera och förmedla kunskap samt att driva opinionsbildning.
