Fraud can have extremely negative consequences on impacted organizations and their stakeholders.
Over the past few years, CPAB integrated fraud thematic reviews into our regular inspections of audit files at annually inspected firms. Our reviews involve a deeper dive into the quality of work performed by auditors to identify, assess and respond to fraud risks. The results of our reviews suggest that auditors could do more to enhance the quality of their fraud risk identification and assessments.
The reviews also provided insights about how international and Canadian auditing standards that deal with an auditor’s responsibilities relating to fraud could be strengthened, enhanced and clarified in the public interest. CPAB is actively engaged with the International Auditing and Assurance Standards Board (IAASB) and the Canadian Auditing and Assurance Standards Board (AASB) as they work toward revising those standards. See CPAB’s comment letter on the IAASB’s Discussion Paper - Fraud and Going Concern in an Audit of Financial Statements (January 2021).
We’ve also been engaging with forensic specialists, investors and other regulators to better understand the public’s expectations of auditors relating to fraud detection and to inform our views about good audit practices. The results of our 2019 and 2021 fraud thematic reviews are available in the Resources sidebar on this page.