Fraud detection has long been a sensitive topic in auditing, and recent scrutiny has pushed global standard setters to act. In response, the International Auditing and Assurance Standards Board (IAASB) has overhauled its fraud-related auditing standard, ISA 240.

The revised guidance shifts expectations for auditors in several ways: it places fraud considerations at the center of risk assessment, sharpens how auditors are expected to react when fraud risks are identified, and requires greater openness in reporting when the audit concerns public companies.

To build the update, the IAASB sought input from a wide range of voices — from regulators and investors to audit professionals of different firm sizes and regions. The outcome was a framework designed to be both rigorous and adaptable, ensuring it can be applied consistently across different types of audit engagements.

Explaining the significance, IAASB Chair Tom Seidenstein noted that the revisions address public concerns head-on by clarifying responsibilities, strengthening fraud-focused procedures, and making audit reports more informative.

Julie Corden, who led the IAASB’s Fraud Task Force, highlighted that the effort was not just about achieving uniformity: “The goal was to reshape how auditors think about and respond to fraud. This marks a substantive change, not just a procedural tweak.”

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