In February 2024 the ISA 240 Fraud standard was proposed to be revised. An exposure draft was issued for public comment ending in June of 2024. The final version was published on 8 July 2025.
Due consideration for fraud in any audit is non-negotiable.
Therefore, knowing where your responsibility starts and stops is vital for success as an auditor.
The final version of the revised ISA 240 standard becomes mandatory for audits of financial statements of clients with a financial year beginning on or after 15 December 2026, though early adoption also usually applies!
Key Enhanced / New Requirements:
- 1. Reinforcing the exercise of PROFESSIONAL SKEPTICISM throughout the audit
- 2. Clarifying and Emphasizing Auditor Responsibilities
- 3. Strengthening Ongoing Communication throughout the Audit with Management and Those Charged with Governance about Matters Related to Fraud
- 4. Applying a Fraud Lens on Risk Identification and Assessment
- 5. Adding Robust Work Effort Requirements When Fraud or Suspected Fraud Is Identified
- 6. Enhancing Transparency on Key Audit Matters Related to Fraud in the Auditor’s Report
- 7. Enhancing Audit Documentation Requirements
- Other Changes:
o Linkages to Other ISAs
o Responses to Assess ROMMs due to Fraud
o Public Sector
o Technology
Introduce you to the new standard and simplify the requirements, so that you can seriously consider early adoption.
Help you draw parallels and understand differences when compared to the previous version of the standard, in order to know how you are to act differently in your capacity as auditor.
Make the requirements as practical as possible by helping you visualise what needs to be done in the revised fraud standard.
The following aspects of the ISA 240 Fraud (Revised 2025) will be identified, simplified and discussed:
• Introduction and scoping, as well as definitions
• Requirements (all will be covered) inter alia:
o Auditor’s responsibilities
o Management and TCWG responsibilities
o Risk identification and assessment
o Required fraud procedures
• Some application material (as may be relevant to practically visualise the requirements)
• Effective dates
• Differences from the previous version of the standard to this version.
