New Fraud Standard

Tuesday, October 28, 2025

In October 2025, the AUASB issued a revised auditing standard ASA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements. ASA 240 applies for financial reporting periods commencing on or after 15 December 2026 and is consistent with a revised standard issued by the International Auditing and Assurance Standards Board (IAASB).

The revised standard:

• Clarifies the auditor’s responsibilities relating to fraud in an audit of a financial report;
• Includes more robust responses to identified risks of material misstatement due to fraud;
• Reinforces the importance of appropriately exercising professional scepticism in fraud-related audit procedures; and
• Strengthens communications on fraud-related procedures with those charged with governance and in auditor’s reports.

The IAASB has published a Fact Sheet to support auditors in implementing the revised standard.