CAS 240: The Auditor's Responsibilities Relating to Fraud
Requires the auditor to identify and assess risks of material misstatement due to fraud, design responses to those risks, and apply professional skepticism throughout.
Why CAS 240 matters
Revenue recognition and management override of controls are presumed fraud risks under CAS 240. Issuers that cannot produce well-documented revenue cut-off testing, journal-entry testing population evidence, and management override response procedures will fail this section.
Framework: Canadian Auditing Standards (CAS)
CAS are the auditing standards adopted by the Auditing and Assurance Standards Board (AASB) of CPA Canada. They are Canadian adoptions of the IAASB's International Standards on Auditing (ISAs) and govern every audit of financial statements performed in Canada.
Primary source: FRAS Canada
Frequently asked
What is CAS 240?
Requires the auditor to identify and assess risks of material misstatement due to fraud, design responses to those risks, and apply professional skepticism throughout.
Why does CAS 240 matter for an audit?
Revenue recognition and management override of controls are presumed fraud risks under CAS 240. Issuers that cannot produce well-documented revenue cut-off testing, journal-entry testing population evidence, and management override response procedures will fail this section.
Which framework does CAS 240 belong to?
CAS 240 falls under Canadian Auditing Standards (CAS). CAS are the auditing standards adopted by the Auditing and Assurance Standards Board (AASB) of CPA Canada. They are Canadian adoptions of the IAASB's International Standards on Auditing (ISAs) and govern every audit of financial statements performed in Canada.
Related standards — Canadian Auditing Standards (CAS)
- CAS 200 — Overall Objectives of the Independent Auditor
- CAS 210 — Agreeing the Terms of Audit Engagements
- CAS 220 — Quality Management for an Audit of Financial Statements
- CAS 230 — Audit Documentation
- CAS 250 — Consideration of Laws and Regulations
- CAS 260 — Communication with Those Charged with Governance
See how Auditus checks CAS 240
Auditus.ai runs PCAOB, ISA, and CAS engagements end-to-end and cites the exact standard behind every finding — including CAS 240.