Fraud, Going Concern, and the Expectation Gap

All parties in the financial reporting ecosystem – which includes management, audit committees, auditors and regulators – have a role to play in addressing fraud and going concern in financial statements.

Although the external audit is only one element within the broader financial reporting ecosystem, the auditor’s role in relation to fraud and going concern in audits of financial statements continues to receive heightened public attention. This is due mainly to an expectation gap between the public’s perception about the role of the auditor and the auditor’s responsibilities in a financial statement audit.

To better understand stakeholder expectations regarding fraud and going concern in financial statements, and how they might be addressed, the AASB started information-gathering efforts in collaboration with CPA Canada and various international organizations such as the Association of Certified Chartered Accountants (ACCA).

Of particular focus in our discussions is the International Auditing and Assurance Standards Board’s recently published Discussion Paper, Fraud and Going Concern in an Audit of Financial Statements.

Connect with us. We want to hear your views.

The AASB will consider Canadians' comments from information-gathering activities in:

• influencing global initiatives on fraud and going concern, including responding to the IAASB’s Discussion Paper and contributing to joint global research in these areas;
• considering the implications for standards relating to fraud and going concern; and
• working with CPA Canada and others on specific actions that may be needed, including development of non-authoritative guidance in these areas.

We believe we are at critical stage for obtaining views of all stakeholders on these issues. Now is your opportunity to influence the many activities both in Canada and Internationally on this topic.